We consider a Hotelling spatial competition model, in which two vendors simultaneously decide, firstly, on location, and, secondly, on price. We assume quadratic transportation costs, so that the vendors would locate at maximum distance in equilibrium. However, we introduce a counter-acting behavioural/psychological/emotional 'attraction' factor that 'confuses' the vendors and pulls them together. We examine the combined effects of economic price-softening driving the vendors apart, versus behavioural attraction, on the vendors' location decision.
|Publication status||Published - 2 Jul 2017|
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
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- Management - Senior Lecturer (Associate Professor)
- Accounting, Finance & Law
- Centre for Business, Organisations and Society (CBOS)
- Centre for Research in Entrepreneurship and Innovation at Bath
Person: Research & Teaching