Hotelling’s Beach with Linear and Quadratic Transportation Costs: Existence of Pure Strategy Equilibria

Egli, Alain (May 2005). Hotelling’s Beach with Linear and Quadratic Transportation Costs: Existence of Pure Strategy Equilibria (Discussion Papers 05-09). Bern: Department of Economics

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In Hotelling type models consumers have the same transportation cost function. We deviate from this assumption and introduce two consumer types. Some consumers have linear transportation costs, while the others have quadratic transportation costs. If at most half the
consumers have linear transportation costs, a subgame perfect equilibrium in pure strategies exists for all symmetric locations. Furthermore, no general principle of differentiation holds. With two consumer types, the equilibrium pattern ranges from maximum to intermediate
differentiation. The degree of product differentiation depends on the fraction of consumer types.

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Egli, Alain

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

Series:

Discussion Papers

Publisher:

Department of Economics

Language:

English

Submitter:

Lars Tschannen

Date Deposited:

02 Oct 2020 11:08

Last Modified:

02 Oct 2020 11:08

JEL Classification:

D34, L13, R32

BORIS DOI:

10.7892/boris.145670

URI:

https://boris.unibe.ch/id/eprint/145670

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