Hotelling’s Competition Models of Incomplete Homogenous Products

JOURNAL OF BEIJING UNIVERSITY OF POSTS AND TELECOM ›› 2004, Vol. 27 ›› Issue (4): 36-40.

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Hotelling’s Competition Models of Incomplete Homogenous Products

LIAO Xiao-wei, Lü Ting-jie

Economic Management School, Beijing University of Posts and Telecommunications, Beijing 100876, China

Received:2003-04-28 Online:2004-04-28

Abstract

Abstract:

A dynamic two-stage game model with spatial differentiation is proposed for products with incomplete homogenous. It is proved that the optimal strategy, in the duopoly market with unequal gross utilities derived from incomplete homogenous products, is neither maximum nor minimum differentiation, if the transportation cost is linear and the customer is uniformly distributed. The players are suggested to choose moderate spatial differentiation strategy, because the minimum differentiation will result in intensive price struggle and maximum differentiation strategy will cost resource. The other problems investigated here include transportation fee balance, monopoly pricing and collusion.

Key words: incomplete homogenous, Hotelling, differentiating, equilibrium

CLC Number:

F224

LIAO Xiao-wei, Lü Ting-jie. Hotelling’s Competition Models of Incomplete Homogenous Products[J]. JOURNAL OF BEIJING UNIVERSITY OF POSTS AND TELECOM, 2004, 27(4): 36-40.

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