Publish in OALib Journal
APC: Only $99
This note analyzes a slightly modified
Hotelling model in which two firms are allowed to choose multiple store locations.
Each firm can endogenously choose the number of stores while opening a store
incurs a set-up cost. We show that the principle of minimum differentiation, i.e., both firms open a store each on
the center, never holds when the set-up cost is decreasing in the number
of stores. Under general cost functions that include non-linear and asymmetric
set up costs, we characterize the conditions under which the principle holds.
General payoff functions that are non-linear in the market share are also