A Unified Treatment of the Segment and the Circular Market Models

Takaaki Takahashi and André Palma

Chapter 13 in Does Economic Space Matter?, 1993, pp 248-273 from Palgrave Macmillan

Abstract: Abstract Following the seminal work of Hotelling (1929), many researchers have studied firms’ strategic choices over price and/or location within spatial markets. These studies on spatial competition are not mere extensions of non-spatial theories but add a new aspect of their own: the introduction of space relaxes price competition between firms because firms scattered over the geographical space acquire some degree of monopoly power. Thus price competition does not necessarily yield a Bertrand outcome (marginal cost pricing).

Keywords: Nash Equilibrium; Circle Model; Switching Cost; Pure Strategy; Segment Model (search for similar items in EconPapers)
Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-22906-2_14

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DOI: 10.1007/978-1-349-22906-2_14

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