Models of spatial competition: A critical review

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis critical review focuses on the development of spatial competition models in which the location choice by firms plays a major role. Therefore, after a brief review of the roots of spatial competition modeling, this paper intends to offer a critical analysis over its recent developments. The starting point is the recognition of the increased importance of this topic through the quantification of the research in this field by using some bibliometric tools. After that, this study proceeds by identifying the main research paths within spatial competition modeling. Specifically, the type of strategy (Bertrand vs. Cournot competition) and its implications over location equilibria are discussed. Additionally, it is presented a comparison of the effects on the location equilibria of the most typical assumptions in literature, that respect to the market (linear vs. circular), production costs, transportation costs, as well as the number of firms. Finally, the type of information (complete vs. incomplete) and its effects over the equilibria are also discussed.

Product differentiation and entry timing in a continuous time spatial competition model

“…By balancing the benefit and cost of 3 Many papers discussed sequential location choices in spatial competition models. Kress and Pesch (2012) and Biscaia and Mota (2013) provided comprehensive surveys on spatial competition.…”

Price Competition and Social Welfare Comparisons Between Large-Scale and Small-Scale Retailers

“…Our notations and assumptions are as follows: (1) Consumers, who are homogeneous except locations, are uniformly distributed along the Hotelling unit interval [0, 1] (Hotelling [9], Biscaia and Mota [2]). (2) Large-scale retailer A is located at 0 and a small-scale local independent retailer B is at 1 on the horizontal unit interval [0, 1].…”

“…Note above that we take into account the consumers' round-trip travel costs from their home to the store unlike the usual Hotelling models (see, e.g., [2,5,6,14]). This is to shed light upon the difference in the traveling costs between the two types of consumers specifically; consumers visiting A only and those visiting both A and B.…”

Dynamic entry in vertically differentiated markets

“…Our focus on this special case is motivated in the subsequent section 3, which establishes how endogenous firm entry generates exactly the entry pattern that is assumed in (10).…”

“…The first condition is that the minimum consumer valuation is zero (v= 0). 10 Our second condition is that qualities exhibit a particularly regular pattern, which we will call the equal relative spacing…”