Game Theory & Math Economics: Gaëtan FOURNIER (Paris-Sorbonne University) - "Efficiency of Equilibria in Hotelling Games" (joint with Marco Scarsini)

Sun, 11/01/201516:00-17:00
Elath Hall, 2nd floor, Feldman Building, Edmond J. Safra Campus
We consider a Hotelling game where a finite number of retailers choose a location, given that their potential customers are distributed on a network. Retailers do not compete on price but only on location. We show that when the number of retailers is large enough, the game admits a pure Nash equilibrium and we construct it. We then compare the equilibrium cost bore by the consumers with the cost that could be achieved if the retailers followed the dictate of a benevolent planner. We look at this efficiency of equilibrium asymptotically in the number of retailers.