2024
DOI: 10.1080/17421772.2024.2323716
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Competition for territories under the switching cost

Akio Torii

Abstract: In this subsection, a two-stage game is analyzed; in the first stage, both stores declare their DAs simultaneously; then, in the second stage, stores determine their uniform price simultaneously. When there is no switching cost, the subgame Nash equilibrium in the second stage exists only if in the first stage stores choose DAs that cover most of the area, although they have incentives to shrink their DAs in the first stage. There is no subgame perfect equilibrium here.Further, when positive switching cost is … Show more

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