Global and local players in a model of spatial competition

Simon Loertscher and Gerd Muehlheusser

Diskussionsschriften from Universitaet Bern, Departement Volkswirtschaft

Abstract: We consider Hotelling location games with global and local players. Global players are active in several markets, while local players act in a single market only. The decisive feature is that global players cannot tailor their product to each market but have to choose a location on the Hotelling line that is valid for all markets in which they are active. Obvious examples include the media industry and politics, where competitors typically compete in several markets with basically the same product. We determine equilibrium configurations for simple specifications of such games. We then show that the presence of gp s tends to induce lower product diversity across markets. Finally, when the number of firms is endogenous, we show how gp s may use their location choice as a preemptive device

Keywords: Hotelling location games; spatial competition; multiple markets; product differentiation; diversity; preemption (search for similar items in EconPapers)
JEL-codes: D45 K21 K23 L11 L51 (search for similar items in EconPapers)
Date: 2005-09
New Economics Papers: this item is included in nep-com, nep-geo and nep-law
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Related works:
Journal Article: Global and local players in a model of spatial competition (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ube:dpvwib:dp0511

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