EQUILIBRIUM EXISTENCE IN THE CIRCLE MODEL WITH LINEAR QUADRATIC TRANSPORT COST

The authors of this paper treat the problem of existence of a location-then-price equilibrium in the circle model with a linear quadratic type of transportation cost function that can be either convex or concave. The existence is shown of a unique perfect equilibrium for the concave case when the linear and quadratic terms are equal and of a unique perfect equilibrium for the convex case when the linear term is equal to zero. Aside from these 2 cases, there are feasible locations by the firms for which no equilibrium in the price subgame exists. Finally, the authors provide a full taxonomy of the price equilibrium regions in terms of weights of the linear and quadratic terms in the cost function.

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  • Corporate Authors:

    Elsevier

    Radarweg 29
    Amsterdam,   Netherlands  1043 NX
  • Authors:
    • de Frutos, M A
    • Hamoudi, H
    • Jarque, X
  • Publication Date: 1999

Language

  • English

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Filing Info

  • Accession Number: 00791326
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Apr 3 2000 12:00AM