Cournot competition in spatial markets : some complementary results on complementarity

Abstract

We study in this paper location equilibria for a symmetrical two-store duopoly selling complementary varieties, both on the linear and the circular markets. In contrast to the existing literature, besides assuming that each affiliate produces a different complementary variety, we equally consider in turns complementarity among all varieties on the market and substitutability between rival varieties. On the segment market, the intuition of a single-plant entity behaviour is enough to obtain and justify the result of central agglomeration. On the circle, instead, we are able to check the multiple equilibria property, to the extent that besides the intuitiive spatial pattern, we identified each time a second one, involving diametrical dispersion, viable though only for low degrees of complementarity.Complementary products, multi-store competition, spatial Cournot model.