Advertisement

CAUDEX SECUNDUS

  • Tönu Puu
Chapter

Abstract

The enigmatic Hotelling duopoly that we discussed in Chap.  7 has never been set in the proper geographical space of two dimensions. Already the case of two sellers on a line interval may be considered technically tricky, especially if we want elastic demand, which we do. The author has thought about this perspective over a long period and also seen many attempts by others, essentially still one dimensional with a thick strip replacing the thin line interval. But this is not what we want. Frankly speaking, it is not even obvious what the Hotelling problem in two dimensions is. Is it three competitors in an equilateral triangle, or what? Though, it seems that not all possible approaches are unmanageable. The main problem is the Euclidean distance which makes integrations difficult (even a market boundary is defined by a quartic equation). And it is not even realistic! If we consider a Manhattan metric in stead, then market boundaries become straight lines in only horizontal, vertical, or diagonal directions, and this simplifies everything. The standard model with inelastic demand even becomes trivial. Anyhow, there are innumerable interesting issues to explore.

Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  • Tönu Puu
    • 1
  1. 1.Centre for Regional Science (CERUM)Umeå UniversityUmeåSweden

Personalised recommendations