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Sequential Entry in Hotelling Model with Location Costs: A Three-Firm Case

In: Spatial Interaction Models

Author

Listed:
  • Stefano Patrí

    (Sapienza University)

  • Armando Sacco

    (Sapienza University)

Abstract

In this paper we consider a Hotelling model on the linear city, where the location is not a free good. We assume that firms play a location-cum-price game, and that the game is played into two steps. 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. In both steps firms have to face a cost for location, for which we consider two different cases.

Suggested Citation

  • Stefano Patrí & Armando Sacco, 2017. "Sequential Entry in Hotelling Model with Location Costs: A Three-Firm Case," Springer Optimization and Its Applications, in: Lina Mallozzi & Egidio D'Amato & Panos M. Pardalos (ed.), Spatial Interaction Models, pages 261-272, Springer.
    • Handle: RePEc:spr:spochp:978-3-319-52654-6_12
    DOI: 10.1007/978-3-319-52654-6_12
    as

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