Applied Microeconomics Early Stage (CAGE - AMES)

Title: 'Simultaneous Location Games with Entry Deterrence (with Gerd Muehlheusser - University of Hamburg)

Abstract: We study location games with entry in which, on the equilibrium path, all entry occurs simultaneously, yet all locations deter entry. For quasiconcave densities, we characterize the equilibrium locations. Without quasiconcavity, we provide sufficient conditions for the game can be dissectable into part-games, each of which exhibits a quasiconcave density and can be solved independently. Extensions and applications analyze abstention (extensive margins), vertical differentiations, and different sources of polarization. Formally, these location games have many players who decide whether to enter in the first stage simultaneously and one player who can enter in stage two. All players bear the same fixed cost of entry and choose a location upon entry.