Technical report RM/15/040, Maastricht University (2015). Hotelling, H.: Stability in competition. n firms locate in sequence, one at a time. • Vertical differentiation model – Gabszwicz and Thisse (1979, 1980); – Shaked and Sutton (1982, 1983) • Monopolistic competition (Chamberlin, 1933) • Advertising and Informational product differentiation (Grossman and Shapiro, 1984) 1. Economides, N., Howell, J., Meza, S.: Does it Pay to be the First? Matsushima and Matsumura (2003a) investigated the sequential choice of location in a mixed oligopoly in which transportation costs are also assumed quadratic. Authors; Authors and affiliations; Stefano Patrí ; Armando Sacco; Chapter. Econ. After the first step, in which the classical duopoly game is played, we suppose that in a second step a third firm enters the market and that the incumbents are allowed to react to this entry. Strategic dissent in the Hotelling-Downs model with sequential entry and private information Bandyopadhyay, Siddhartha, Bhalla, Manaswini, Chatterjee, Kalyan and Roy, Jaideep 2017, Strategic dissent in the Hotelling-Downs model with sequential entry and private information, Research in economics, vol. We solve then the cases in which costs are linear (as in Hotelling’s original model) and in which costs are quadratic. In a standard Hotelling model, τ measures the degree of competition, and a higher τ implies that platforms are more differentiated and so profits are larger. : Endogenous sequential entry in a spatial model. Karmon, J.: Rental costs, city vs. suburbs: a handy infographic. Stern School of Business, New York University, New York (2002). Econometrica. In Hotelling’s original model, consumers always consume the good, they thus minimize their disutility Min (d(x,a)+p,d(x,b)+q). In homogeneous goods markets, price competition leads to perfectly competitive outcome, even with two rms Models where dierentiation is modeled as spatial location: 1Linear (Hotelling) model 2Circular (Salop) model Compare prices and variety in competitive equilibrium versus \social" optimum. Sci. J. Ind. • Duopoly with same physical good. Econ. Youping Li . With or without a reservation price, consumer x prefers firm B whenever d(x,a)+p ≥ d(x,b)+q. Hotelling's law is an observation in economics that in many markets it is rational for producers to make their products as similar as possible. Stefano Patrí, Armando Sacco, Sequential Entry in Hotelling Model with Location Costs: A Three-Firm Case, Spatial Interaction Models, 10.1007/978-3-319-52654-6_12, (261-272), (2017). Stuart, H.W., Jr.: Efficient spatial competition. The observation was made by Harold Hotelling (1895–1973) in the article "Stability in Competition" in Economic Journal in 1929. We also study the catalog compe-tition in the circular model of Salop (1979). 1 Spatial Competition 1.1 The linear city (Hotelling, 1929) • Linear city of length 1. Urban Econ. Palfrey, T.: Spatial equilibrium with entry. J. Jost, P.-J., Schubert, S., Zschoche, M.: Incumbent positioning as a determinant of strategic response to entry. J. Polit. In the Hotelling Pricing Game, firms can set prices and locations are fixed. The classical model of spatial competition (Hotelling, 1929) predicts that, when two firms (or two political parties) compete for customers (voters) by choosing locations on a linear market (policy space), the only stable outcome is for both firms to locate at the center of the market. Sci. The easiest way to view Hotelling's model as a game, is to strictly divide his model into two parts, and make a game for each: a pricing game and a location game. and Thisse (1991) examined a mixed market using a Hotelling-type location-then-price model with quadratic transportation costs. _�y�6�zs��f�����Fq�p �L���%˗�Zŕ̻�w�@5�(G����8� [Ֆ*�}�avf������g^����1撨��˞��m���Mu�s7}bf��@���;��K�2��KM�7|���J,M��*�]>���n��k��!w�$F�^-b���=d��d��֫ʝ�����ΐ�+:/�4��{P� ���in+ҷ�̈e����s�k��^��:kW��L��?��]O��?\>1Jl�"/�3��[n�,.��z��{����ݔ8�3�\Z�����S].|/�z�|����'鑭�e����E=�^��:�MLU.�X|�3����ʴ��γ�> m�rФ��H�(a����/t�|��(�*cf�A�7Ƕ� ��p7#�R Econometrica. Organ. pp 261-272 | The assumptions of the standard 3-firm Hotelling location model are as follows: (i) Three firms i = 1, 2,3 locate on a segment of unit length, at locations xi (i = 1, 2,3) and sell a homogeneous commodity. 51-66, doi: 10.1016/j.rie.2016.11.002. Abstract We analyze the Hotelling-Downs model of winner-take-all elections with sequential entry where ≥2 ‘office-seeking’ candidates with privately known qualities choose entry decisions and commit to policy platforms on entering. School of Business, East China University of Science and Technology, Shanghai, China . (2015, forthcoming). Cite as. %PDF-1.6 %���� It results that demand uncertainty can be seen as a di⁄erentiation force when the –rst entrant faces demand uncertainty and as an agglomeration force when it is the second entrant. Econ. Early models often assumed costless relocation, so two candidates would be expected to eventually converge to the median voter regardless of their initial positions (Hotelling, 1929; Downs, 1957; Eaton and Lipsey, 1975). Rev. Lett. We analyze the sequential choices of locations in the Hotelling [0, 1] space ofvariety-differentiated products. 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