Projects per year
Abstract
We study spatial competition by firms which is often studied in the context of linear markets where customers always shop at the nearest firm. Here, customer behavior is determined by a probability vector p= (p1, … , pn) where pi is the probability that a customer visits the ith closest firm. At the same time, the market is circular a là Salop (Bell J Econ 10(1):141–156, 1979), which has the advantage of isolating the impact of customer shopping behavior from market boundary effects. We show that non-convergent Nash equilibria, in which firms cluster at distinct positions on the market, always exist for convex probability vectors as well as probability vectors exhibiting a certain symmetry. For concave probability vectors, on the other hand, we show that non-convergent Nash equilibria are unlikely to exist.
Original language | English |
---|---|
Pages (from-to) | 285-306 |
Number of pages | 22 |
Journal | Review of Economic Design |
Volume | 26 |
Issue number | 3 |
DOIs | |
Publication status | Published - Sept 2022 |
Fingerprint
Dive into the research topics of 'Equilibria on a circular market when consumers do not always buy from the closest firm'. Together they form a unique fingerprint.Projects
- 1 Finished
-
Towards an integrated model of reasoning and reasoning development
Dunn, J. (Investigator 01)
ARC Australian Research Council
1/01/19 → 31/12/21
Project: Research