Hotelling's competition with general customer distributions

Shilony, Yuval

doi:10.1016/0165-1765(81)90090-2

Cited by 25 publications

(15 citation statements)

References 3 publications

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“…Several papers have introduced general distributions of consumers in models of horizontal differentiation, as in Hotelling (1929) firms and consumers are located on a line or a circle. Shilony (1981) and Neven (1986) were the first to characterize the subgame perfect equilibrium of the location-price game with nonuniform distributions, and to determine its existence and uniqueness. Different applications have then been implemented.…”

Section: Introductionmentioning

confidence: 99%

The Importance of the Distribution of Consumers in Horizontal Product Differentiation

Calvó‐Armengol

Zénou

2002

Journal of Regional Science

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This paper examines the importance of the distribution of consumers in Hotelling's circle on the comparison between the optimal and the market equilibrium levels of diversity. It finds that when most consumers are located very close to the firms, the result of Salop-that the equilibrium number of firms is larger than the optimal one (surplus maximizing)-can be reversed. Copyright 2002 Blackwell Publishers

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Section: Introductionmentioning

confidence: 99%

The Importance of the Distribution of Consumers in Horizontal Product Differentiation

Calvó‐Armengol

Zénou

2002

Journal of Regional Science

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“…This becomes even more striking when one recalls that PNE may not exist in facility location games (with no mediator) (Osborne 1993), and are generally hard to characterize (see e.g. (Shilony 1981;Ewerhart 2015)). We bound its intervention cost (for the uniform distribution), and show that its intervention cost is lower than that of DICT.…”

Section: Our Resultsmentioning

confidence: 99%

From Recommendation Systems to Facility Location Games

Ben-Porat

Goren

Rosenberg

et al. 2019

AAAI

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Recommendation systems are extremely popular tools for matching users and contents. However, when content providers are strategic, the basic principle of matching users to the closest content, where both users and contents are modeled as points in some semantic space, may yield low social welfare. This is due to the fact that content providers are strategic and optimize their offered content to be recommended to as many users as possible. Motivated by modern applications, we propose the widely studied framework of facility location games to study recommendation systems with strategic content providers. Our conceptual contribution is the introduction of a mediator to facility location models, in the pursuit of better social welfare. We aim at designing mediators that a) induce a game with high social welfare in equilibrium, and b) intervene as little as possible. In service of the latter, we introduce the notion of intervention cost, which quantifies how much damage a mediator may cause to the social welfare when an off-equilibrium profile is adopted. As a case study in high-welfare low-intervention mediator design, we consider the one-dimensional segment as the user domain. We propose a mediator that implements the socially optimal strategy profile as the unique equilibrium profile, and show a tight bound on its intervention cost. Ultimately, we consider some extensions, and highlight open questions for the general agenda.

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“…For instance, studies have focused on the structure of transport costs and customer distribution (e.g., Shilony ; Matsumura and Okamura ), the introduction of search costs (Braid ), delivered pricing models (Hamilton et al. ; Colombo ), or multiproduct competition (Janssen et al ).…”

mentioning

confidence: 99%