2025/01/26 by Joep van Sloun, van Sloun, Joep
Business, Management and Accounting · Economics, Econometrics and Finance · #Economic theories and models #FOS: Economics and business #Supply Chain and Inventory Management #Theoretical Economics (econ.TH)
paper · pdf · doi:10.48550/arxiv.2501.15545
openalex publication_date 2025/01/26 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
This paper revisits the Hotelling model with waiting costs Kohlberg (1983), focusing on two specific settings where pure Nash equilibria do not exist: the asymmetric model with two firms and the symmetric model with three firms. In the asymmetric two-firm model, we show that the weaker concept of point rationalizability has strong predictive power, as it selects exactly two locations for both firms. As the two firms become more similar in their efficiency in handling queues of consumers, the two point rationalizable locations converge towards the center of the line. In the symmetric three-firm model, the set of point rationalizable choices forms an interval. This interval is shrinking in the inefficiency levels of the firms in handling queues of consumers.