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- Title
The Principle of Minimum Differentiation Reconsidered: Some New Developments in the Theory of Spatial Competition.
- Authors
Eaton, B. Curtis; Lipsey, Richard G.
- Abstract
The paper is divided into two parts: one-dimensional markets and two-dimensional markets. Within each we distinguish (a) bounded, (b) unbounded but finite, and (c) unbounded, infinite spaces. Among other things, we show: in one dimension the nature of the space is not, as many investigators have thought, critical; in two dimensions, however, the very existence of equilibrium may depend upon the nature of the space; the commonlyused rectangular customer density function yields results that do not generalize to any other density function; multiple equilibria occur in many simple models; and MD occurs only when the number of firms is restricted to two.
- Subjects
COMPETITION; ECONOMICS; MODELS &; modelmaking; ECONOMIC equilibrium; ECONOMIC stabilization; MARKETS; SUPPLY &; demand; MARKET equilibrium
- Publication
Review of Economic Studies, 1975, Vol 42, Issue 1, p27
- ISSN
0034-6527
- Publication type
Article
- DOI
10.2307/2296817