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Location-price equilibria in a spatial model of discriminatory pricing
Affiliation:1. Faculdade de Ciências e Tecnologia and Center for Advanced Studies in Management and Economics, Universidade Nova de Lisboa, Caparica 2829-516, Portugal;2. Católica Porto Business School, Universidade Católica Portuguesa, Rua Diogo de Botelho, 1327, Porto 4169-005, Portugal;3. Faculdade de Economia and Center for Economics and Finance, Universidade do Porto, Rua Dr. Roberto Frias, Porto 4200-464, Portugal;1. Auckland University of Technology, Private Bag 92006, Auckland, New Zealand;2. Department of Finance, Auckland University of Technology, Private Bag 92006, Auckland 1142, New Zealand;3. Department of Economics and Finance, Southern Illinois University Edwardsville, Edwardsville, IL 62026-1102, USA;1. Board of Governors of the Federal Reserve System, Division of Monetary Affairs, United States;2. Board of Governors of the Federal Reserve System, Division of Financial Stability, United States;3. University of Cologne, QuantCo, Inc., United States;1. Olin Business School, Washington University in St Louis, One Brookings Drive, St Louis, MO 63130;2. Columbia Business School, Columbia University, 116th and Broadway, New York, NY 10027;1. Computer Science Department, School of Computer Science, Bina Nusantara University, Jl. KH. Syahdan No. 9, Jakarta 11480, Indonesia
Abstract:A location-price equilibrium is derived for a market with a constraint on the number of different prices each firm can charge. The sequence of these equilibria is shown to converge to the equilibrium in a market with perfect price discrimination.
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