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- Title
Revisiting price equilibrium existence in the linear-city model of spatial competition.
- Authors
Hamoudi, Hamid; Martín-Bustamante, Marcos Sanz
- Abstract
This paper focuses on the analysis of price equilibrium in a two-stage game within the linear-city model of spatial competition. Assuming a convex linear-quadratic transport cost function the study computes locations on the unit line for which price equilibrium exists. By introducing a decisive change of variable to allow for symmetry in the profit functions of both firms, the study allocates the exact regions of location pairs where price equilibrium exists. Therefore, it completes the analysis on equilibrium existence for convex linear-quadratic transport costs functions.
- Subjects
PRICES; PRICING; ECONOMIC competition; PROFIT; MARKETING
- Publication
Papers in Regional Science, 2011, Vol 90, Issue 1, p179
- ISSN
1056-8190
- Publication type
Article
- DOI
10.1111/j.1435-5957.2010.00308.x