We investigate the effects of restricting locations of firms into Hotelling duopoly models. In the standard location-price models, the equilibrium distance between firms is too large from the viewpoint of consumer welfare. Thus, restricting locations of firms and reducing the distance between...

The paper investigates a three-country duopoly model. Two developed countries have large markets and one developing country has a cost advantage. The author finds that strategic complementarity in location choice yields multiple equilibria. One is a cost-oriented agglomeration of firms in the...