Cooperation vs. competition in a spatial model

This paper discusses the element of cooperation between firms in the form of information exchange through communication into the Hotelling spatial competition model. It is shown that subgame perfect equilibrium in a two-stage game can be achieved in a wide range from minimum differentiation to maxim...

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Bibliographic Details
Published in:Regional science and urban economics 1999-07, Vol.29 (4), p.463-472
Main Authors: Mai, Chao-cheng, Peng, Shin-kun
Format: Article
Language:English
Subjects:
Cluster analysis
Co-operation
Communication
Competition
Cooperation
Economic concentration
Economic models
Electronics industry
Equilibrium
Game theory
High tech industries
Information dissemination
Information exchange
Innovations
Spatial models
Studies
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Summary:This paper discusses the element of cooperation between firms in the form of information exchange through communication into the Hotelling spatial competition model. It is shown that subgame perfect equilibrium in a two-stage game can be achieved in a wide range from minimum differentiation to maximum differentiation, depending upon the relative strength of the cooperation effect over the competition effect. This result is exemplified in the economics of the Silicon Valley.
ISSN:0166-0462
1879-2308
DOI:10.1016/S0166-0462(99)00007-1