A duopoly location toolkit: Consumer densities which yield unique spatial duopoly equilibria

Kieron J. Meagher, Ernie G.S. Teo, Wen Wang

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)

Abstract

Anderson, Goeree and Ramer (1997) observe that although the Uniform consumer density is almost universally assumed in Hotelling style location games, it is more realistic to assume non-uniform distributions. Using Anderson et al.'s (1997) sufficient conditions for the existence of a unique pure strategy equilibrium, we extend the list of known distributions with characterised equilibria from two (Uniform and Triangular) to seven. Our extension includes the Normal and Logistic distributions which are commonly used in empirical research. We also analyse the effects of density choice on equilibrium outcomes. Holding the mean and dispersion of consumer tastes constant, we find that the Uniform distribution inflates differentiation effects.

Original languageEnglish
Article number14
JournalB.E. Journal of Theoretical Economics
Volume8
Issue number1
DOIs
Publication statusPublished - 2008
Externally publishedYes

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