Arbeitspapier

Mixed equilibrium in a pure location game: The case of n ≥ 4 firms

The Hotelling game of pure location allows interpretations in spatial competition, political theory, and professional forecasting. In this paper, the doubly symmetric mixed-strategy equilibrium for n ≥ 4 firms is characterized as the solution of a well-behaved boundary value problem. The analysis suggests that, in contrast to the cases n = 3 and n → ∞ , the equilibrium for a finite number of n ≥ 4 firms tends to overrepresent locations at the periphery of its support interval. Moreover, in the class of examples considered, an increase in the number of firms universally leads to a wider range of location choices and to a more dispersed distribution of individual locations. The results are used to comment on the potential benefit of competition in forecasting markets.

Language
Englisch

Bibliographic citation
Series: Working Paper ; No. 168

Classification
Wirtschaft
Noncooperative Games
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
Oligopoly and Other Imperfect Markets
Subject
Location
Hotelling game
mixed-strategy equilibrium
boundary value problem

Event
Geistige Schöpfung
(who)
Ewerhart, Christian
Event
Veröffentlichung
(who)
University of Zurich, Department of Economics
(where)
Zurich
(when)
2014

DOI
doi:10.5167/uzh-97669
Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Ewerhart, Christian
  • University of Zurich, Department of Economics

Time of origin

  • 2014

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