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B. C. Eaton and R. G. Lipsey, “Product Differentiation,” In: R. Schmalensee and R. D. Willig, Eds., Handbook of Industrial Organization, Volume I, Elsevier Science Publishers, Amsterdam, 1989, pp. 723-768. doi:10.1016/S1573-448X(89)01015-0

has been cited by the following article:

• TITLE: Instability in the Hotelling’s Non-Price Spatial Competition Model

  AUTHORS: Yosuke Yasuda

  KEYWORDS: Hotelling Model; Multiple Locations; The Principle of Minimization

  JOURNAL NAME: Theoretical Economics Letters, Vol.3 No.3A, June 18, 2013

  ABSTRACT: This note analyzes a slightly modified Hotelling model in which two firms are allowed to choose multiple store locations. Each firm can endogenously choose the number of stores while opening a store incurs a set-up cost. We show that the principle of minimum differentiation, i.e., both firms open a store each on the center, never holds when the set-up cost is decreasing in the number of stores. Under general cost functions that include non-linear and asymmetric set up costs, we characterize the conditions under which the principle holds. General payoff functions that are non-linear in the market share are also considered.