Best-response potential for Hotelling pure location games

Takuya Iimura, Pierre von Mouche and Takahiro Watanabe

Economics Letters, 2017, vol. 160, issue C, 73-77

Abstract: We revisit two-person one-dimensional pure location games à la Anderson et al. (1992) and show that they admit continuous best-response potential functions (Voorneveld, 2000) if demand is sufficiently elastic (to the extent that the Principle of Minimum Differentiation fails); if demand is not that elastic (or is completely inelastic) they still admit continuous quasi-potential functions (Schipper, 2004). We also show that, even if a continuous best-response potential function exists, a generalized ordinal potential function (Monderer and Shapley, 1996) need not exist.

Keywords: Symmetric games; Location games; Best-response potential games; Pure Nash equilibrium existence (search for similar items in EconPapers)
JEL-codes: C72 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:160:y:2017:i:c:p:73-77

DOI: 10.1016/j.econlet.2017.08.025

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