Equilibria in unidirectional spatial models

Dimitrios Xefteris

Economics Letters, 2013, vol. 119, issue 2, 146-149

Abstract: This paper (a) characterizes the unique Nash equilibrium of the unidirectional Hotelling–Downs game in which firms maximize their market shares, for any distribution of the consumers, and (b) analyzes equilibrium behavior in the variation of the game in which each firm aims to secure a larger market share than its competitor. In the first case, firms employ identical mixed strategies and each of them serves (in expected terms) a fraction (1/e) of the market and in both cases no firm ever locates in a position to the left of the first quartile of the consumers’ distribution.

Keywords: Hotelling–Downs model; Directional constraints; Mixed strategies (search for similar items in EconPapers)
JEL-codes: C72 D43 L13 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:119:y:2013:i:2:p:146-149

DOI: 10.1016/j.econlet.2013.02.006

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