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| Type | Working Paper |
| Scope | Discipline-based scholarship |
| Title | Mixed equilibrium in a pure location game: the case of n ≥ 4 firms |
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| Institution | University of Zurich |
| Series Name | Working paper series / Department of Economics |
| Number | 168 |
| ISSN | 1664-7041 |
| Number of Pages | 21 |
| Date | 2014 |
| Abstract Text | The Hotelling game of pure location allows interpretations in spatial competition, political theory, and professional forecasting. In this paper, the doubly symmetric mixed-strategy equilibrium for n ≥ 4 firms is characterized as the solution of a well-behaved boundary value problem. The analysis suggests that, in contrast to the cases n = 3 and n → ∞ , the equilibrium for a finite number of n ≥ 4 firms tends to overrepresent locations at the periphery of its support interval. Moreover, in the class of examples considered, an increase in the number of firms universally leads to a wider range of location choices and to a more dispersed distribution of individual locations. The results are used to comment on the potential benefit of competition in forecasting markets. |
| Official URL | http://www.econ.uzh.ch/static/wp/econwp168.pdf |
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| Keywords | Location, Hotelling game, mixed-strategy equilibrium, boundary value problem, Hotelling-Regel, Ressourcenallokation, Wettbewerb, Gleichgewichtstheorie |