IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-17-00132.html
   My bibliography  Save this article

Hotelling competition with behaviourally-confused vendors

Author

Listed:
  • Richard Fairchild

    (School of Management, University of Bath)

  • Graham Mallard

    (Visting Scholar, Department of Economics, University of Bath)

Abstract

We consider a Hotelling spatial competition model, in which two vendors simultaneously decide, firstly, on location, and, secondly, on price. We assume quadratic transportation costs, so that the vendors would locate at maximum distance in equilibrium. However, we introduce a counter-acting behavioural/psychological/emotional 'attraction' factor that 'confuses' the vendors and pulls them together. We examine the combined effects of economic price-softening driving the vendors apart, versus behavioural attraction, on the vendors' location decision.

Suggested Citation

  • Richard Fairchild & Graham Mallard, 2017. "Hotelling competition with behaviourally-confused vendors," Economics Bulletin, AccessEcon, vol. 37(3), pages 1450-1456.
    • Handle: RePEc:ebl:ecbull:eb-17-00132
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/Pubs/EB/2017/Volume37/EB-17-V37-I3-P131.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Hotelling spatial competition; quadratic transportation costs; economic price-softening; behavioural attraction; location decision.;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-17-00132. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.