Hamilton, Jonathan H; Klein, James F.; Sheshinski, Eytan; … - In: Canadian Journal of Economics 27 (1994) 4, pp. 903-17
The authors analyze a duopoly model where firms first choose locations on a line segment and then choose quantities in the second stage. Pure strategy quantity equilibria fail to exist for locations close together. For low transport costs, near agglomeration occurs and the firms choose locations...