Reports
Discussion Papers
No.943 Are spatial differentiation and product differentiation substitutes?
by Toshitaka Gokan, Jacques-François Thisse
October 2024
ABSTRACT
We revisit the Hotelling model in the case of firms selling differentiated varieties. When product differentiation outweighs travel costs, the location-then-price game has a unique subgame perfect Nash equilibrium in which the two firms located at the market center.
Keywords: location, product differentiation, agglomeration
JEL classification: D43; L13; R12
PDF available at https://hdl.handle.net/2344/0002001133
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