Endogenous sequential entry in a spatial model revisited

This article reexamines sequential entry of firms in a Hotelling model of spatial product differentiation as analyzed by Neven [Neven, D.J., 1987. Endogenous sequential entry in a spatial model. International Journal of Industrial Organization 5, 419–434.]. I show that the pattern of locations is ge...

Full description

Saved in:
Bibliographic Details
Published inInternational journal of industrial organization Vol. 23; no. 3; pp. 249 - 261
Main Author Gotz, George
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.04.2005
Elsevier
Elsevier Sequoia S.A
SeriesInternational Journal of Industrial Organization
Subjects
Competition
Deterrence
Duopoly
Economic models
Economic theory
Enterprises
Entry deterrence
Game theory
Hotelling model
Industrial economics
Industrial organization
Location of industry
Market entry
Market theory
Mathematical models
Pricing
Product differentiation
Spatial models
Strategic location choice
Studies
Entry deterrence
Hotelling model
L11
Strategic location choice
L13
Online AccessGet full text

Cover

More Information
Summary:This article reexamines sequential entry of firms in a Hotelling model of spatial product differentiation as analyzed by Neven [Neven, D.J., 1987. Endogenous sequential entry in a spatial model. International Journal of Industrial Organization 5, 419–434.]. I show that the pattern of locations is generally asymmetric in the case of a duopoly. Profits are non-monotonic in market size, even in the range where the number of firms does not change. The firm that bears the “burden” of entry deterrence gains from lower barriers to entry as long as entry deterrence is possible. Equilibrium profits of all firms may be larger in situations in which more firms are active.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0167-7187
1873-7986
DOI:10.1016/j.ijindorg.2004.11.002