Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/127064
Authors: 
Ebina, Takeshi
Matsushima, Noriaki
Shimizu, Daisuke
Year of Publication: 
2014
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 915
Abstract: 
We extend the well-known spatial competition model (d'Aspremont et al., 1979) to a continuous time model in which two firms compete in each instance. Our focus is on the entry timing decisions of firms and their optimal locations. We demonstrate that the leader has an incentive to locate closer to the centre to delay the follower's entry, leading to a non-maximum differentiation outcome. We also investigate how exogenous parameters affect the leader's location and firms' values and, in particular, numerically show that the profit of the leader changes non-monotonically with an increase in the transport cost parameter.
Subjects: 
Location
Hotelling model
Continuous time
Entry timing
JEL: 
L13
R32
C72
Document Type: 
Working Paper

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