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Pré-publication, Document de travail Année : 2016

The Principle of Minimum Differentiation Revisited: Return of the Median Voter *

Résumé

We study a linear location model (Hotelling, 1929) in which n (with n ≥ 2) boundedly rational players follow (noisy) myopic best-reply behavior. We show through numerical and mathematical analysis that such players spend almost all the time clustered together near the center, re-establishing the " Principle of Minimum Differentiation " that had been discredited by equilibrium analyses. Thus, our analysis of the best-response dynamics shows that when considering market dynamics as well as their policy and welfare implications, it may be important to look beyond equilibrium analyses.
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Dates et versions

hal-01312466, version 1 (06-05-2016)

Identifiants

  • HAL Id : hal-01312466 , version 1

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Nobuyuki Hanaki, Emily Tanimura, Nicolaas J. Vriend. The Principle of Minimum Differentiation Revisited: Return of the Median Voter *. 2016. ⟨hal-01312466⟩
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