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Equilibria in unidirectional spatial models

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  • Xefteris, Dimitrios

Abstract

This paper (a) characterizes the unique Nash equilibrium of the unidirectional Hotelling–Downs game in which firms maximize their market shares, for any distribution of the consumers, and (b) analyzes equilibrium behavior in the variation of the game in which each firm aims to secure a larger market share than its competitor. In the first case, firms employ identical mixed strategies and each of them serves (in expected terms) a fraction (1/e) of the market and in both cases no firm ever locates in a position to the left of the first quartile of the consumers’ distribution.

Suggested Citation

  • Xefteris, Dimitrios, 2013. "Equilibria in unidirectional spatial models," Economics Letters, Elsevier, vol. 119(2), pages 146-149.
    • Handle: RePEc:eee:ecolet:v:119:y:2013:i:2:p:146-149
    DOI: 10.1016/j.econlet.2013.02.006
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    References listed on IDEAS

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    1. Jean J. Gabszewicz & Didier Laussel & Michel Le Breton, 2008. "The Mixed Strategy Nash Equilibrium Of The Televison News Scheduling Game," Journal of Industrial Economics, Wiley Blackwell, vol. 56(2), pages 418-418, June.
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    6. Berk, Jonathan B & Hughson, Eric & Vandezande, Kirk, 1996. "The Price Is Right, but Are the Bids? An Investigation of Rational Decision Theory," American Economic Review, American Economic Association, vol. 86(4), pages 954-970, September.
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    10. Cancian, Maria & Bills, Angela & Bergstrom, Theodore, 1995. "Hotelling Location Problems with Directional Constraints: An Application to Television News Scheduling," Journal of Industrial Economics, Wiley Blackwell, vol. 43(1), pages 121-124, March.
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    Cited by:

    1. Giat, Yahel & Manes, Eran, 2023. "Firm response to ethically motivated boycotts," European Journal of Operational Research, Elsevier, vol. 305(1), pages 300-311.
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    3. Laussel, Didier & Le Breton, Michel & Xefteris, Dimitrios, 2013. "Simple Centrifugal Incentives in Downsian Dynamics," TSE Working Papers 13-405, Toulouse School of Economics (TSE).
    4. Dimitrios Xefteris & Didier Laussel & Michel Le Breton, 2017. "Simple centrifugal incentives in spatial competition," International Journal of Game Theory, Springer;Game Theory Society, vol. 46(2), pages 357-381, May.

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    More about this item

    Keywords

    Hotelling–Downs model; Directional constraints; Mixed strategies;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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