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Game Theory in Economics: Recent Advances in Spatial Competition
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Game Theory in Economics: Recent Advances in Spatial Competition

A special issue of Games (ISSN 2073-4336). This special issue belongs to the section "Applied Game Theory".

Deadline for manuscript submissions: 30 November 2024 | Viewed by 2039

Special Issue Editor

Dr. Stefano Colombo

E-Mail Website
Guest Editor
Department of Economics and Finance, Università Cattolica del Sacro Cuore, 20123 Milano, Italy
Interests: antitrust; industrial organization; economics of business and marketing; regional science; spatial economics; game theory

Special Issue Information

Dear Colleagues,

The term “spatial competition models” is commonly used to indicate the class of models in which space plays a central role in determining the result of the interaction between economic agents. Starting from the seminal contribution of Hotelling (1929), spatial competition has become a central theme for economists and regional scientists, dealing with issues such as agglomeration, dispersion, and so on. Nowadays, game theory is commonly adopted in spatial competition models, and it is not an exaggeration to say that game-theoretic concepts and tools have improved our understanding of spatial competition by creating new models and extending existing ones.

This Special Issue aims to collect original, high-quality applications of game-theoretic methods to spatial competition models (e.g., Hotelling, Salop, other spatial models). A non-exhaustive list of these methods includes, but is not limited to, static games, repeated games, Stackelberg games, entry games, and cooperative games. Applications include, but are not limited to, firms’ location, urban agglomeration/dispersion, horizontal and vertical differentiation, competition between private and public firms, and R&D competition.

Dr. Stefano Colombo
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Games is an international peer-reviewed open access semimonthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1600 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • spatial competition
  • Hotelling
  • Salop
  • horizontal differentiation
  • vertical differentiation

Published Papers (2 papers)

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Research

29 pages, 1297 KiB  
Article
Random Informative Advertising with Vertically Differentiated Products
by Rim Lahmandi-Ayed and Didier Laussel
Games 2024, 15(2), 10; https://doi.org/10.3390/g15020010 - 22 Mar 2024
Viewed by 592
Abstract
We study a simple model in which two vertically differentiated firms compete in prices and mass advertising on an initially uninformed market. Consumers differ in their preference for quality. There is an upper bound on prices since consumers cannot spend more on the [...] Read more.
We study a simple model in which two vertically differentiated firms compete in prices and mass advertising on an initially uninformed market. Consumers differ in their preference for quality. There is an upper bound on prices since consumers cannot spend more on the good than a fixed amount (say, their income). Depending on this income and on the ratio between the advertising cost and quality differential (relative advertising cost), either there is no equilibrium in pure strategies or there exists one of the following three types: (1) an interior equilibrium, where both firms have positive natural markets and charge prices lower than the consumer’s income; (2) a constrained interior equilibrium, where both firms have positive natural markets, and the high-quality firm charges the consumer’s income or (3) a corner equilibrium, where the low-quality firm has no natural market selling only to uninformed customers. We show that no corner equilibrium exists in which the high-quality firm would have a null natural market. At an equilibrium (whenever there exists one), the high-quality firm always advertises more, charges a higher price and makes a higher profit than the low-quality one. As the relative advertising cost goes to infinity, prices become equal and the advertising intensities converge to zero as well as the profits. Finally, the advertising intensities are, at least globally, increasing with the quality differential. Finally, in all cases, as the advertising parameter cost increases unboundedly, both prices converge increasingly towards the consumer’s income. Full article
(This article belongs to the Special Issue Game Theory in Economics: Recent Advances in Spatial Competition)
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20 pages, 998 KiB  
Article
Location of Firms and Outsourcing
by Stefano Colombo and Arijit Mukherjee
Games 2023, 14(6), 70; https://doi.org/10.3390/g14060070 - 31 Oct 2023
Viewed by 1114
Abstract
We analyze the location of final goods producers under spatial competition with strategic input price determination by firm-specific input suppliers when the final goods producers undertake complete outsourcing or bi-sourcing. Under complete outsourcing, the final goods producers locate closer as the distance between [...] Read more.
We analyze the location of final goods producers under spatial competition with strategic input price determination by firm-specific input suppliers when the final goods producers undertake complete outsourcing or bi-sourcing. Under complete outsourcing, the final goods producers locate closer as the distance between the input suppliers decreases, but the distance between the final goods producers may increase or decrease with the transportation costs of the consumers and the transportation costs between the input suppliers and the final goods producers depending on the distance between the input suppliers. The possibility of bi-sourcing reduces the benefit from saving the transportation costs between the input suppliers and the final goods producers, and creates effects which are opposite to those under complete outsourcing. Thus, our results differ significantly from the extant literature considering either no strategic input price determination or strategic input price determination under competition in the input market. We also discuss the implications on the profits, consumer surplus and welfare, and the implications of endogenous location choice of the input suppliers. Full article
(This article belongs to the Special Issue Game Theory in Economics: Recent Advances in Spatial Competition)
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