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The mixed strategy equilibrium of the three-firm location game with discrete location choices

Author

Listed:
  • Zhiyong Huang

    (Department of Statistics, Hanken School of Economics)

Abstract

In the paper, we derive a symmetric MSE for the three-firm location game on the discrete strategy space. Rather than being uniformly distributed, the MSE for the game has a multimodal distribution. Our theory is more convincing to predict equilibria of three-firm location games in the real world or controlled experiments, where players face finitely many choices.

Suggested Citation

  • Zhiyong Huang, 2011. "The mixed strategy equilibrium of the three-firm location game with discrete location choices," Economics Bulletin, AccessEcon, vol. 31(3), pages 2109-2116.
    • Handle: RePEc:ebl:ecbull:eb-11-00093
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I3-P190.pdf
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    References listed on IDEAS

    as
    1. Shaked, A, 1982. "Existence and Computation of Mixed Strategy Nash Equilibrium for 3-Firms Location Problem," Journal of Industrial Economics, Wiley Blackwell, vol. 31(1-2), pages 93-96, September.
    2. Collins, Richard & Sherstyuk, Katerina, 2000. "Spatial Competition with Three Firms: An Experimental Study," Economic Inquiry, Western Economic Association International, vol. 38(1), pages 73-94, January.
    3. A. P. Lerner & H. W. Singer, 1937. "Some Notes on Duopoly and Spatial Competition," Journal of Political Economy, University of Chicago Press, vol. 45(2), pages 145-145.
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    More about this item

    Keywords

    mixed strategy equilibrium; multimodal distribution; discrete strategy space;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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