TY - JOUR
T1 - Farsighted stable sets in Hotelling's location games
AU - Shino, Junnosuke
AU - Kawasaki, Ryo
N1 - Funding Information:
The authors thank Yukihiko Funaki, Yoshio Kamijo, Yoshifumi Muroi, Shigeo Muto, Daijiro Okada, Tomas Sjöström, two anonymous reviewers, and the seminar participants at Waseda University for very helpful comments. Kawasaki gratefully acknowledges financial support from the Japan Society for the Promotion of Science (JSPS) through the Grant-in-aid for Research Activity Start-up ( 22830010 ). Views expressed are those of authors and do not necessarily reflect those of the Bank of Japan.
PY - 2012/1
Y1 - 2012/1
N2 - We apply the farsighted stable set to two versions of Hotelling's location games: one with a linear market and another with a circular market. It is shown that there always exists a farsighted stable set in both games, which consists of location profiles that yield equal payoff to all players. This stable set contains location profiles that reflect minimum differentiation as well as those profiles that reflect local monopoly. These results are in contrast to those obtained in the literature that use some variant of Nash equilibrium. While this stable set is unique when the number of players is two, uniqueness no longer holds for both models when the number of players is at least three.
AB - We apply the farsighted stable set to two versions of Hotelling's location games: one with a linear market and another with a circular market. It is shown that there always exists a farsighted stable set in both games, which consists of location profiles that yield equal payoff to all players. This stable set contains location profiles that reflect minimum differentiation as well as those profiles that reflect local monopoly. These results are in contrast to those obtained in the literature that use some variant of Nash equilibrium. While this stable set is unique when the number of players is two, uniqueness no longer holds for both models when the number of players is at least three.
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U2 - 10.1016/j.mathsocsci.2011.09.001
DO - 10.1016/j.mathsocsci.2011.09.001
M3 - Article
AN - SCOPUS:84155162596
SN - 0165-4896
VL - 63
SP - 23
EP - 30
JO - Mathematical Social Sciences
JF - Mathematical Social Sciences
IS - 1
ER -