2021/03/19 by Jeffrey D. Michler, Michler, Jeffrey D., Benjamin M. Gramig +1 · 1 citation
Business, Management and Accounting · Decision Sciences · Economics, Econometrics and Finance · #Auction Theory and Applications #Consumer Market Behavior and Pricing #FOS: Economics and business #General Economics (econ.GN) #Merger and Competition Analysis #Theoretical Economics (econ.TH)
paper · pdf · doi:10.48550/arxiv.2103.11051
openalex publication_date 2021/03/19 · openalex created_date 2022/07/25 · openalex updated_date 2026/07/28
Previous research on two-dimensional extensions of Hotelling's location game\nhas argued that spatial competition leads to maximum differentiation in one\ndimensions and minimum differentiation in the other dimension. We expand on\nexisting models to allow for endogenous entry into the market. We find that\ncompetition may lead to the min/max finding of previous work but also may lead\nto maximum differentiation in both dimensions. The critical issue in\ndetermining the degree of differentiation is if existing firms are seeking to\ndeter entry of a new firm or to maximizing profits within an existing, stable\nmarket.\n