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A high-rise on Main Street: Hotelling with mobile consumers

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  • Martin Richardson

Abstract

This note considers Hotelling’s (1929) model of locational choices by two firms and subsequent price competition in a setting where atomistic consumers locate first. It is shown that any equilibrium in pure strategies involves either one or two mass points with all surplus captured either by the consumers or by firms, respectively.

Suggested Citation

  • Martin Richardson, 2004. "A high-rise on Main Street: Hotelling with mobile consumers," ANU Working Papers in Economics and Econometrics 2004-444, Australian National University, College of Business and Economics, School of Economics.
    • Handle: RePEc:acb:cbeeco:2004-444
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    File URL: https://www.cbe.anu.edu.au/researchpapers/econ/wp444.pdf
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    1. Osborne, Martin J & Pitchik, Carolyn, 1987. "Equilibrium in Hotelling's Model of Spatial Competition," Econometrica, Econometric Society, vol. 55(4), pages 911-922, July.
    2. Masahisa Fujita & Jacques-François Thisse, 1986. "Spatial Competition with a Land Market: Hotelling and Von Thunen Unified," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(5), pages 819-841.
    3. Economides, Nicholas, 1986. "Minimal and maximal product differentiation in Hotelling's duopoly," Economics Letters, Elsevier, vol. 21(1), pages 67-71.
    4. Unknown, 1986. "Letters," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 1(4), pages 1-9.
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