Instability in competition : hotelling re-reconsidered

  • In this paper we show that Puu (2002) does not provide a stable solution to the location game, according to his own definition of stability. If the usual two-stage game is considered, where in the first stage a location is chosen once and forever, and in the second stage prices are determined, the equilibrium proves stable for a sizeable interval of parameters, however. Even though this procedure is most common in analyzing Hotelling's location problem, it is not satisfying because it exhibits an inconsistent informational structure. The search for a better concept of stability is imperative.

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Author:Helge Sanner
Series (Serial Number):Volkswirtschaftliche Diskussionsbeiträge (Bd. 079)
Document Type:Book
Year of Completion:2005
Publishing Institution:Universität Potsdam
Release Date:2007/06/18
RVK - Regensburg Classification:QD 100
Organizational units:Wirtschafts- und Sozialwissenschaftliche Fakultät / Wirtschaftswissenschaften
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Notes extern:Sanner, Helge: Instability in competition : hotelling re-reconsidered / Helge Sanner. - Potsdam : Univ., 2005. - 10 S. : graph. Darst.
(Volkswirtschaftliche Diskussionsbeiträge : Diskussionsbeitrag ; 79)