Discussion of “Location in a Disk City with Consumer Concentration Around the Center”
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Where do firms locate in geographical or product space? The paper by Manfred Stadler tries to shed some new light on this issue by extending the one-dimensional city line of the seminal Hotelling model to a two-dimensional disk. At least for the location interpretation this seems to be a more realistic assumption. While there have been already some other papers that also consider a two-dimensional setting (either rectangular or circular), the specific contribution of Stadler’s paper is the analysis of different classes of symmetric two-dimensional distributions of consumer locations that allow a parametrization of the degree of concentration around the center. In particular, he shows that for all such distributions both firms locate symmetrically on a line through the center and move closer to the center if the degree of concentration is increased.
From a technical point of view, it is very nice that the model is structured in a way that allows the derivation of explicit solutions for...
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