A high-rise on Main Street: Hotelling with mobile consumers

Martin Richardson ()

ANUCBE School of Economics Working Papers from Australian National University, College of Business and Economics, School of Economics

Abstract: This note considers Hotelling’s (1929) model of locational choices by two firms and subsequent price competition in a setting where atomistic consumers locate first. It is shown that any equilibrium in pure strategies involves either one or two mass points with all surplus captured either by the consumers or by firms, respectively.

Date: 2004-07
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