Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7242663 | Journal of Economic Behavior & Organization | 2018 | 43 Pages |
Abstract
This paper extends Hotelling's model of price competition with quadratic transportation costs from a line to graphs. We derive an algorithm to calculate firm-level demand for any given graph, conditional on prices and firm locations. These graph models of price competition may lead to spatial discontinuities in firm-level demand. We show that the existence result of d'Aspremont et al. (1979) does not extend to graphs that cannot be reduced to a line or circle.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Pim Heijnen, Adriaan R. Soetevent,