Instability in Competition: Hotelling Re-reconsidered

Helge Sanner

No 79, Volkswirtschaftliche Diskussionsbeiträge from Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät

Abstract: In this paper we show that Puu (2002) does not provide a stable solution to the location game, according to his own definition of stability. If the usual two-stage game is considered, where in the first stage a location is chosen once and forever, and in the second stage prices are determined, the equilibrium proves stable for a sizeable interval of parameters, however. Even though this procedure is most common in analyzing Hotelling's location problem, it is not satisfying because it exhibits an inconsistent informational structure. The search for a better concept of stability is imperative.

Keywords: Hotelling's main street; Instability of equilibrium (search for similar items in EconPapers)
JEL-codes: D43 L11 L13 R30 (search for similar items in EconPapers)
Date: 2005-09
New Economics Papers: this item is included in nep-com and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://nbn-resolving.de/urn:nbn:de:kobv:517-opus-14299 (application/pdf)

Related works:
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:pot:vwldis:79

Access Statistics for this paper

More papers in Volkswirtschaftliche Diskussionsbeiträge from Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät Contact information at EDIRC.
Bibliographic data for series maintained by Marco Winkler ().