Price competition on graphs
| Authors | |
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| Publication date | 2010 |
| Series | Tinbergen Institute discussion paper, TI 2010-126/1 |
| Number of pages | 45 |
| Publisher | Amsterdam: Tinbergen Institute |
| Organisations |
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| Abstract | This paper extends Hotelling's model of price competition with quadratic transportation costs from a line to graphs. I propose an algorithm to calculate firm-level demand for any given graph, conditional on prices and firm locations. One feature of graph models of price competition is that spatial discontinuities in firm-level demand may occur. I show that the existence result of D'Aspremont et al. (1979) does not extend to simple star graphs. I conjecture that this non-existence result holds more generally for all graph models with two or more firms that cannot be reduced to a line or circle. |
| Document type | Report |
| Language | English |
| Published at | http://www.tinbergen.nl/ti-publications/discussion-papers.php/discussion-papers.php?paper=1687 |
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(Final published version)
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