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A Unified Treatment of the Segment and the Circular Market Models

  • Takaaki Takahashi
  • André de Palma

Abstract

Following the seminal work of Hotelling (1929), many researchers have studied firms’ strategic choices over price and/or location within spatial markets. These studies on spatial competition are not mere extensions of non-spatial theories but add a new aspect of their own: the introduction of space relaxes price competition between firms because firms scattered over the geographical space acquire some degree of monopoly power. Thus price competition does not necessarily yield a Bertrand outcome (marginal cost pricing).

Keywords

Nash Equilibrium Circle Model Switching Cost Pure Strategy Segment Model 
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Copyright information

© Hiroshi Ohta and Jacques-François Thisse 1993

Authors and Affiliations

  • Takaaki Takahashi
  • André de Palma

There are no affiliations available

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