A Continuous Logit Hotelling Model with Endogenous Locations of Consumers

Journal article


Publication Details

Author(s): Wrede M
Journal: Economics letters
Publisher: Elsevier
Publication year: 2015
Volume: 126
Pages range: 81-83
ISSN: 0165-1765
Language: English


Abstract


This paper analyzes location and price choices of firms and subsequent location choices of consumers in a linear city model when consumers have different perceptions of locations and firms. The study utilizes a continuous logit model to describe consumers’ location and supplier choices. A unique subgame perfect Nash equilibrium exists where firms make positive profits and the minimum differentiation principle applies. For identical firms, prices converge to marginal costs as heterogeneity of consumers’ perceptions disappears.



FAU Authors / FAU Editors

Wrede, Matthias Prof. Dr.
Lehrstuhl für Volkswirtschaftslehre, insbesondere Sozialpolitik


How to cite

APA:
Wrede, M. (2015). A Continuous Logit Hotelling Model with Endogenous Locations of Consumers. Economics letters, 126, 81-83. https://dx.doi.org/10.1016/j.econlet.2014.11.024

MLA:
Wrede, Matthias. "A Continuous Logit Hotelling Model with Endogenous Locations of Consumers." Economics letters 126 (2015): 81-83.

BibTeX: 

Last updated on 2018-19-04 at 03:02