Mixed duopoly under hotelling with convex production costs

John Heywood, Dongyang Li and Guangliang Ye ()
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Dongyang Li: Renmin University of China
Guangliang Ye: Hainan University

The Annals of Regional Science, 2022, vol. 69, issue 2, No 8, 487-510

Abstract: Abstract Dragone and Lambertini (Reg Sci Urban Econ 84:103568, 2020) show that in a Hotelling duopoly with linear transport cost, sufficiently convex production cost generates an elevated price equilibrium with collocation at the middle. We examine the consequences of a mixed duopoly under these cost assumptions. No equilibrium exists in a mixed duopoly with simultaneous location. Equilibria exist under location leadership. Private firm leadership generates greater welfare than public firm leadership, a result different from previous examinations. A mixed duopoly with a foreign firm generates an equilibrium with firms usually located apart but with the public firm serving all interior customers. This typically increases welfare relative to the fully private market.

JEL-codes: L13 L32 L52 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s00168-022-01144-8

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