Dynamic Hotelling Duopoly with Linear Transportation Costs

Lambertini, Luca (2000) Dynamic Hotelling Duopoly with Linear Transportation Costs. Bologna: Dipartimento di Scienze economiche DSE, p. 19. DOI 10.6092/unibo/amsacta/4903. In: Quaderni - Working Paper DSE (398). ISSN 2282-6483.
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Abstract

I investigate a spatial duopoly model with linear transportation costs as a differential game where product differentiation is the result of firms’ R&D investments. Two related results obtain, i.e., (i) the steady state R&D investment (product differentiation) is negatively (positively) related to the cost of capital and time discounting; and (ii) if time discounting and the cost of capital are suficiently high, the amount of differentiation observed in steady state is suficiently large to ensure the existence of a unique pure-strategy price equilibrium with prices above marginal cost.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Keywords
horizontal differentiation, di¤erential games, steady state, R&D
Subjects
ISSN
2282-6483
DOI
Deposit date
18 Mar 2016 10:29
Last modified
18 Mar 2016 10:29
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