We consider a location-then-price game where two traditional retailers compete with a location-irrelevant online retailer. We characterize the existing equilibria, and we show that in any possible equilibrium there is direct competition between the traditional retailers. Furthermore, the traditional retailers locate at neither a maximal nor minimal distance. In equilibrium, the price of the online retailer might be higher or lower than the price of the traditional retailers, depending on the relative competitiveness of the online retailer and the traditional retailers.
Colombo, S., Hou, Z., Location-price equilibria when traditional retailers compete against an online retailer, <<REVIEW OF INDUSTRIAL ORGANIZATION>>, 2021; (59): 483-502. [doi:10.1007/s11151-021-09814-1] [http://hdl.handle.net/10807/187372]
Location-price equilibria when traditional retailers compete against an online retailer
Colombo, Stefano;
2021
Abstract
We consider a location-then-price game where two traditional retailers compete with a location-irrelevant online retailer. We characterize the existing equilibria, and we show that in any possible equilibrium there is direct competition between the traditional retailers. Furthermore, the traditional retailers locate at neither a maximal nor minimal distance. In equilibrium, the price of the online retailer might be higher or lower than the price of the traditional retailers, depending on the relative competitiveness of the online retailer and the traditional retailers.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.