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Launhardt and Hotelling

Author

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  • Rodolphe DOS SANTOS FERREIRA

    (B.E.T.A., Université Louis Pasteur, Strasbourg, Institut Universitaire de France)

Abstract

The paper discusses the relation between the justly famous Hotelling’s [1929] paper on stability in competition and the corresponding passages of the often ignored Launhardt’s [1885] book, devoted to mathematical economics. Launhardt is sometimes credited for the anticipation of Hotelling’s spatial model and the analysis of oligopolistic competition with product differentiation. The paper argues that Launhardt’s model is in fact significantly more general, in particular in introducing vertical along with horizontal differentiation, and that his analysis of strategic competition is correspondingly finer and more complete. Thus, the earlier author does not appear to be a forerunner of the later, rather the later a successor of the earlier. However, Hotelling did (objectively) innovate in a significant way, by endogenizing locations as strategic variables, and principally by developing the concept of an abstract characteristics space, which transcends the geographical space.

Suggested Citation

  • Rodolphe DOS SANTOS FERREIRA, 1998. "Launhardt and Hotelling," Discussion Papers (REL - Recherches Economiques de Louvain) 1998016, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvre:1998016
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    File URL: http://sites.uclouvain.be/econ/DP/REL/1998016.pdf
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    Cited by:

    1. Jeroen Hinloopen & Stephen Martin, 2024. "The Hotelling Line at 95: Introduction to the Special Issue," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 65(3), pages 627-648, November.
    2. Rodolphe Dos Santos Ferreira & Louis-André Gérard-Varet, 2000. "Introduction," Cahiers d'Économie Politique, Programme National Persée, vol. 37(1), pages 7-30.
    3. Luca Lambertini & Manuela Mosca, 2014. "The Bertrand Paradox, the Useless Auctioneer and the Launhardt Model," Australian Economic Papers, Wiley Blackwell, vol. 53(3-4), pages 170-183, December.
    4. Sallstrom Matthews, S.E., 2007. "The Principle of Moderate Differentiation," Cambridge Working Papers in Economics 0720, Faculty of Economics, University of Cambridge.
    5. Nisvan Erkal, 2010. "Hotelling’s Model of Spatial Competition," Chapters, in: Mark Blaug & Peter Lloyd (ed.), Famous Figures and Diagrams in Economics, chapter 22, Edward Elgar Publishing.

    More about this item

    JEL classification:

    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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