We analyze the equilibrium and the optimal resource allocations in a monocentric city under monopolistic competition. Unlike the constant elasticity of substitution (CES) case, where the equilibrium markups are independent of the city size, we present a variable elasticity of substitution (VES)...

We show that in a duopoly operating in a congested market, with a general congestion function and an arbitrary distribution of consumer disutility for congestion, there cannot exist an asymmetric Nash equilibrium. We also show that whenever an equilibrium does exist it is unique. Closed form...

I consider a two period model with an incumbent firm and a potential entrant each of whom produces a homogeneous good. There is a demand uncertainty: it can be high or low and it realizes in the second period. The question I ask: How by choosing capacity at an earlier period of actual production...

Media industries are important drivers of popular culture. A large fraction of leisure time is devoted to radio, magazines, newspapers, the Internet, and television (the illustrative example henceforth). Most advertising expenditures are incurred for these media. They are also mainly supported...

We consider the two-stage game proposed by Kreps and Scheinkman [83] in the address model of horizontal differentiation developed by Hotelling. Firms choose capacities in the first stage and then compete in price. We show that capacity precommitment softens price competition drastically. In...

This paper considers a model of district formation that incorporates a notion of regional industrial systems. Each firm chooses its location from the set of existing industrial districts. The heterogeneous firms are distinguished by its "stand alone" district-dependent production and...

An infinite-horizon, stochastic model of entry and exit with sunk costs and imperfect competition is constructed. Simple examples provide insights into: (1) the relationship between sunk costs and industry concentration, (2) entry when current profits are negative, and (3) the relationship...

This paper studies a strategic market game where agents fragment their bids on different markets. Simple conditions for existence of an interior equilibrium point are provided. In equilibrium, all agents are active on the same markets and prices are identical across markets, so that all...

We consider the effects of export restraints on price competition in the Hotelling model of horizontal product differentiation. We characterise the Nash equilibrium for all possible values of the quota and compare our results with those of Krishna. We show that a foreign producer would choose a...

We consider the two-stage game proposed by Kreps and Scheinkman in the adress model of horizontal differenciation developed by Hotelling. Firms choose capacities in the first stage and then compete in price. We show that capacity precommitment softens price competitio drastically.