Product differentiation and location decisions under demand uncertainty

• 成果类型: Article
• 署名作者: Meagher, KJ; Zauner, KG
• 署名单位: University of Vienna; University of New South Wales Sydney
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2003.12.006
• 发表日期: 2004
• 页码: 201-216
• 关键词: location; product differentiation; uncertainty; hotelling; spatial competition; oligopoly; discrete choice

摘要

We investigate Hotelling's duopoly game of location-then-price choices with quadratic transportation costs and uniformly distributed consumers under the assumption that firms are uncertain about the exact location of demand. We characterize the unique equilibrium and the socially optimal locations. Contrary to the individual-level random utility models, location uncertainty is a differentiation force. In equilibrium, increases in the variance of the uncertainty lead to greater differentiation, higher expected equilibrium prices and profits, and a greater welfare loss. (C) 2004 Elsevier Inc. All rights reserved.