Competition in multiple characteristics: An empirical test of location equilibrium

Javier Elizalde (jelizalde@unav.es)

Regional Science and Urban Economics, 2013, vol. 43, issue 6, 938-950

Abstract: With products differentiated in multiple dimensions, the location equilibrium for a duopolistic market exhibits maximum differentiation in one dimension and minimum differentiation in all the other dimensions. This paper analyses whether this equilibrium arises using real data for the Spanish movie theatre exhibition market where the firms (cinemas) are differentiated along two main dimensions (their geographical location and the set of movies exhibited). Data not only shows a trade-off, in that closer theatres tend to choose a higher proportion of different movies, but also that there is a tendency towards either max–min or min–max product differentiation.

Keywords: Spatial competition; Location; Price; Product differentiation; Multiple dimensions; Equilibrium (search for similar items in EconPapers)
JEL-codes: L13 L82 R39 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:43:y:2013:i:6:p:938-950

DOI: 10.1016/j.regsciurbeco.2013.09.007

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