In this paper we consider the spatial model by Anderson and Neven (1991) to study the subgame perfect equilibria without restricting the consumers' reservation price. New equilibria emerge where firms locate at disperse points in space. Also, at equilibrium, firms may monopolize some segments of...

This paper proposes an aspiration-based model of bounded rationality, which is applied to a large-population context where agents are re-matched every period to play a Prisoner's Dilemma.