Asymmetric Spatial Competition

Sougata Poddar () and Ruby Toh

Departmental Working Papers from National University of Singapore, Department of Economics

Abstract: This paper considers price and location decisions of competing duopolists through an approach that integrates the traditional inside location and outside location model. One firm locates inside a linear city along with consumers while the other locates outside it. We analyze a location-price simultaneous game as well as a location-then price sequential game and characterize the equilibria in pure strategies. The transport cost are assumed to be linear-quadratic and borne by the consumers. We find the results are contrasting to the traditional inside and outside location models and the stability of the proposed model is intermediate between the two.

Keywords: Inside-outside location model; spatial competition; product differentiation; transportation costs; cross-border shopping (search for similar items in EconPapers)
JEL-codes: C72 D43 L13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-geo, nep-ind, nep-mic and nep-ure
Date: 2006-07
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Persistent link: http://EconPapers.repec.org/RePEc:nus:nusewp:wp0604

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