The Annals of Regional Science

, Volume 44, Issue 2, pp 377–407 | Cite as

Spatial Cournot equilibrium: do branches matter?

  • Santiago Carbó Valverde
  • Miguel Ángel Fortes Escalona
Original Paper

Abstract

This paper aims to contribute to the literature of Cournot spatial equilibria in two-dimensional spaces by considering branching. We study the case in which two firms compete on a circle and each one has the possibility of opening one or more branches. An innovative method—polar coordinates—is employed to obtain the complex profit functions. We show that there exists a symmetric subgame perfect Nash equilibrium where both firms place their n branches alternately and at the same distance from the center of the circle. Additionally, we show that this is, up to rotation, the unique symmetric equilibrium location.

JEL Classification

D43 L13 

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Copyright information

© Springer-Verlag 2008

Authors and Affiliations

  • Santiago Carbó Valverde
    • 1
  • Miguel Ángel Fortes Escalona
    • 2
  1. 1.Departamento de Teoría e Historia Económica, Facultad de Ciencias Económicas y EmpresarialesUniversidad de GranadaGranadaSpain
  2. 2.Departamento de Matemática Aplicada, Facultad de Ciencias Económicas y EmpresarialesUniversidad de GranadaGranadaSpain

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