Location-then-Price Competititon with Uncertain Consumer Tastes
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Meagher, Kieron; Zauner, Klaus
Description
We investigate Hotelling's duopoly game of location-then-price choices with quadratic transportation costs and uniformly distributed consumers under the assumption that firms are uncertain about consumer tastes. When the uncertainty has a uniform distribution on the closed interval [-L/2,L/2], with 0 < L < ∞, we characterize the unique equilibrium and the socially optimal locations. Contrary to the individual-level random utility models, we find that uncertainty is a differentiation force. For...[Show more]
Collections | ANU Research Publications |
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Date published: | 2005 |
Type: | Journal article |
URI: | http://hdl.handle.net/1885/19950 |
Source: | Economic Theory |
DOI: | 10.1007/s00199-004-0520-6 |
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01_Meagher_Location-then-Price_2005.pdf | 159.42 kB | Adobe PDF | Request a copy |
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