Wrede M (2015)
Publication Language: English
Publication Type: Journal article
Publication year: 2015
Publisher: Elsevier
Book Volume: 126
Pages Range: 81-83
DOI: 10.1016/j.econlet.2014.11.024
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.
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.
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