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With products differentiated in multiple dimensions, the location equilibrium for a duopolistic market exhibits maximum differentiation in one dimension and minimum differentiation in all the other dimensions. This paper analyses whether this equilibrium arises using real data for the Spanish...
Persistent link: https://www.econbiz.de/10010730152
We extend Hotelling’s model of spatial competition by adding an outside good, provided by a webshop. Unlike the commonly used reservation price, the price of the webshop is endogenous. We establish that a Nash equilibrium exists if the outside good is not too different from the goods sold by...
Persistent link: https://www.econbiz.de/10010863085
In a three-stage duopoly game with product design at stage 1, advertising & marketing at stage 2, and price competition at stage 3, advertising & marketing enable customers to distinguish the goods from each other thus relaxing price competition. The subgame perfect equilibria of the three stage...
Persistent link: https://www.econbiz.de/10008542875
This study presents the results of an experiment on spatial differentiation of products in Hotelling-type models with different grades of complexity for companies’ choices of space. Three models were compared, including models with a single decision variable (single-dimensional space with...
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I introduce non-perfect substitutability between products into the spatial Bertrand model. I show that if goods are complements, the firms always agglomerate. If goods are substitutes, the firms agglomerate if the transportation costs are not too high. Copyright Springer-Verlag Berlin Heidelberg...
Persistent link: https://www.econbiz.de/10010681335