Competition in Multiple Characteristics: An Empirical Test of Location Equilibrium

Javier Elizalde ()

No 06/10, Faculty Working Papers from School of Economics and Business Administration, University of Navarra

Abstract: With products differentiated in multiple dimensions, the location equilibrium for a duopolistic market exhibits aximum 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 dimensions (their geographical location and the set of movies exhibited). Data not only shows a trade-off such that closer theatres tend to choose a higher proportion of different movies but also there is a tendency towards either max-min or min-max product differentiation.

Keywords: Spatial competition; Horizontal product differentiation; Multiple dimensions; Equilibrium (search for similar items in EconPapers)
JEL-codes: L13 L82 R39 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2010-03-22
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Related works:
Journal Article: Competition in multiple characteristics: An empirical test of location equilibrium (2013)
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