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Please use this identifier to cite or link to this item: http://hdl.handle.net/2108/141

Title: Prices and locations in a spatial duopoly under uniform delivered pricing
Authors: Iozzi, Alberto
Keywords: spatial duopoly
uniform delivered price
Issue Date: Dec-2000
Publisher: CEIS
Series/Report no.: Quaderni CEIS; 128
Abstract: 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.
URI: http://hdl.handle.net/2108/141
Appears in Collections:Quaderni

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