Cournot Competition Yields Spatial Avoiding Competition in Groups

Chia-Ming Yu and Fu-Chuan Lai

Industrial Organization from University Library of Munich, Germany

Abstract: This paper characterizes the properties of equilibrium location patterns in an Anderson-Neven-Pal model and uses these characteristics to comprehensively find the subgame perfect Nash equilibria, most of which are not yet found in the literature. Since the external competition effect may be exactly canceled out, or internal competition strictly dominates external competition, or the internal competition effect is consistent with the external competition effect, therefore without any externality and prior collusion, a competitive group structure may form endogenously in equilibrium and firms tend to avoid competition inside each group. The analyses of an Anderson-Neven-Pal model are instructive in studying the conditions for a capacity to implement a ``Nash combination."

Keywords: Cournot competition; Spatial competition; Nash equilibrium (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2003-10-23
New Economics Papers: this item is included in nep-com and nep-ind
Note: Type of Document - pdf; prepared on Win98; to print on all A4 printers; pages: 27; figures: TeXCad 2 pages. 27 pages, pdf, figures included in the pdf file the original writing of another joint paper with Gupta, Pal, and Sarkar in IJIO, 2003
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpio:0310004

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