SSRN Author: Qiang GongQiang Gong SSRN Content
http://www.ssrn.com/author=1425408
http://www.ssrn.com/rss/en-usWed, 04 May 2016 01:16:35 GMTeditor@ssrn.com (Editor)Wed, 04 May 2016 01:16:35 GMTwebmaster@ssrn.com (WebMaster)SSRN RSS Generator 1.0REVISION: Optimal Product Differentiation in a Circular ModelSince circular model was introduced in Salop (1979), it has been the workhorse for analyzing spatial competition among differentiated firms. A common assumption in this literature is that firms are evenly spaced on the circle, even when entry is allowed. We characterize conditions for even spacing to be an equilibrium, using a two-stage (location-then-price) circular model with general transport cost function. Under duopoly competition, we characterize a mild sufficient condition -- the first derivative of transport cost is concave (together with an assumption governing the transport cost difference to the two firms). If one only considers pure strategy equilibrium in prices, this sufficient condition is weakened to the first derivative of transport cost being -1-concave. These conditions ensure that firms' profits are concave in their prices when firms are evenly spaced and that even spacing maximizes profits. Under oligopoly competition (N>= 2 firms), we characterize a necessary ...
http://www.ssrn.com/abstract=1600931
http://www.ssrn.com/1493100.htmlTue, 03 May 2016 05:22:19 GMTREVISION: Optimal Product Differentiation in a Circular ModelSince circular model was introduced in Salop (1979), it has been the workhorse for analyzing spatial competition among differentiated firms. A common assumption in this literature is that firms are evenly spaced on the circle, even when entry is allowed. We characterize conditions for even spacing to be an equilibrium, using a two-stage (location-then-price) circular model with general transport cost function. Under duopoly competition, we characterize a mild sufficient condition -- the first derivative of transport cost is concave. If one only considers pure strategy equilibrium in prices, this sufficient condition is weakened to the first derivative of transport cost being -1-concave. Under oligopoly competition (N>=2 firms), we characterize a necessary condition for even spacing to be an equilibrium. This necessary condition involves the third derivative of transport cost, so having convex transport cost in general is neither necessary nor sufficient to determine equilibrium ...
http://www.ssrn.com/abstract=1600931
http://www.ssrn.com/1475981.htmlSat, 05 Mar 2016 05:24:00 GMT