Hotelling games with three, four, and more players

Arbeitspapier

In this paper the standard Hotelling model with quadratic transport costs is extended to the multi-firm case. The sequential game consists of a location choice stage and a price setting stage. Considering locational equilibria it is shown that neither holds the Principle of Maximum Differentiation - as in the duopoly model - nor does the Principle of Minimum Differentiation hold - as in the multiple firms game with linear transport cost. This result is in line with recent research which shows that the extreme differentiation patterns are often not stable if one adds flexibility to the model. For games with up to nine players explicit subgame perfect equilibrium solutions are calculated. They are characterized by a U-shaped price structure and interior corner firms locations. Welfare considerations show that the level of differentiation is almost at the socially optimal level if the number of firms is larger than three. If it is smaller then there is too little differentiation.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: SFB 373 Discussion Paper ; No. 2001,23

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Noncooperative Games ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Oligopoly and Other Imperfect Markets ; Other Spatial Production and Pricing Analysis
• Thema: spatial competition ; multi-firm competition ; interval

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Brenner, Steffen
• Ereignis: Veröffentlichung
• (wer): Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes
• (wo): Berlin
• (wann): 2001

Weitere Informationen

• Handle: http://hdl.handle.net/10419/62702
• URN: urn:nbn:de:kobv:11-10049461
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ