We explore a variant of the Hotelling model which allows to nest horizontal and vertical differentiation into a unified setup whose key parameter is the relative natural market size of the firms. In this setup, equilibrium prices increase whenever population's disparity decreases. We also...

Two contiguous regions compete to attract a population of heterogeneous firms. They choose infrastructure levels in a first stage and compete in taxes in a second stage. We study the properties of Subgame Perfect Nash equilibria in this stage game depending on the extent to which the benefits of...