Sequential Entry in Hotelling Model with Location Costs: A Three-Firm Case

Stefano Patrí (stefano.patri@uniroma1.it) and Armando Sacco (armando.sacco@uniroma1.it)
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Stefano Patrí: Sapienza University
Armando Sacco: Sapienza University

A chapter in Spatial Interaction Models, 2017, pp 261-272 from Springer

Abstract: Abstract In this paper we consider a Hotelling model on the linear city, where the location is not a free good. We assume that firms play a location-cum-price game, and that the game is played into two steps. After the first step, in which the classical duopoly game is played, we suppose that in a second step a third firm enters the market and that the incumbents are allowed to react to this entry. In both steps firms have to face a cost for location, for which we consider two different cases.

Keywords: Nash Equilibrium; Demand Function; Profit Function; Location Stage; Incumbent Firm (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spochp:978-3-319-52654-6_12

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DOI: 10.1007/978-3-319-52654-6_12

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