Sequential location under one-sided demand uncertainty

Aurélie Bonein () and Stéphane Turolla

Research in Economics, 2009, vol. 63, issue 3, 145-159

Abstract: In entering a new market, firms face demand uncertainty. We depart from the usual Hotelling duopoly model with sequential entry. We allow firms to locate outside of the city and assume that market conditions are common knowledge. We then introduce one-sided demand uncertainty. We find that demand uncertainty can be seen as a differentiation force when faced by the first entrant and as an agglomeration force when faced by the second entrant. Finally, the second firm's imperfect information implies higher welfare losses.

Keywords: Location; Hotelling; Sequential; duopoly; game; Product; differentiation; Demand; uncertainty (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1090-9443(09)00026-X
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Sequential location under one-sided demand uncertainty (2009)
Working Paper: Sequential Location under one-sided Demand Uncertainty (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:63:y:2009:i:3:p:145-159

Access Statistics for this article

Research in Economics is currently edited by Federico Etro

More articles in Research in Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().