Location Equilibrium for Cournot Oligopoly in Spatially Separated Markets
Abstract:Consider a two-stage non-cooperative Cournot game with location choice involving n≥ 2 firms each with several facilities. There are m≥ 2 spatially separated markets constituting the vertices of a network. Each firm first selects the locations of their facilities and then selects the quantities to supply to the markets to maximize its profit. There exists a Nash equilibrium in the quantities offered by each firm at the markets. Furthermore, when the demand in each market is sufficiently large, each firm chooses to locate its facilities only at vertices. With linear demand in each market, there exists a Nash location equilibrium.
Document Type: Original Article
Affiliations: 1: Department of Mathematical Sciences, Indiana University-Purdue University at Indianapolis, Indianapolis, Indiana 46202, U.S.A. E-mail: firstname.lastname@example.org 2: Department of Economics, Miami University, Oxford, Ohio 45056, U.S.A. E-mail: email@example.com 3: Department of Economics, University of Cincinnati, Cincinnati, Ohio 45221, U.S.A. E-mail: firstname.lastname@example.org
Publication date: 1997-05-01