I analyse a two-stage location-price duopoly game under uniform delivered pricing when firms produce homogenous goods and are unable to ration the supply. Two tie-breaking rules (TBR) are studied: consumers either buy from the nearest firm or buy from either firms with equal probabilities. Under the first TBR, I find multiple single-price equilibria. Equilibrium locations are shown to be symmetric and to be such that the distance between firms increases (decreases) with the transportation cost (c) when c is high (low). Under the second TBR, firms cluster to the centre of the market line and choose the price that gives them zero profits. Surprisingly, when c is low, consumers are better off when they randomly select from which firm to buy.
Iozzi, A. (2000). Prices and locations in a spatial duopoly under uniform delivered pricing.
|Citazione:||Iozzi, A. (2000). Prices and locations in a spatial duopoly under uniform delivered pricing.|
|Settore Scientifico Disciplinare:||Settore SECS-P/01 - Economia Politica|
|Data di pubblicazione:||dic-2000|
|Titolo:||Prices and locations in a spatial duopoly under uniform delivered pricing|
|Appare nelle tipologie:||99 - Altro|