Discussion of “Location in a Disk City with Consumer Concentration Around the Center”

Excerpt

Where do firms locate in geographical or product space? The paper by Manfred Stadler tries to shed some new light on this issue by extending the one-dimensional city line of the seminal Hotelling model to a two-dimensional disk. At least for the location interpretation this seems to be a more realistic assumption. While there have been already some other papers that also consider a two-dimensional setting (either rectangular or circular), the specific contribution of Stadler’s paper is the analysis of different classes of symmetric two-dimensional distributions of consumer locations that allow a parametrization of the degree of concentration around the center. In particular, he shows that for all such distributions both firms locate symmetrically on a line through the center and move closer to the center if the degree of concentration is increased. …