Honest Car Sales » Economics http://honestcarsales.com Good Cars - Good Prices Sun, 29 Mar 2009 14:37:14 +0000 http://wordpress.org/?v=2.9.1 en hourly 1 Applying the Hotelling Model, is price competition intense in the industry for car sales? http://honestcarsales.com/applying-the-hotelling-model-is-price-competition-intense-in-the-industry-for-car-sales http://honestcarsales.com/applying-the-hotelling-model-is-price-competition-intense-in-the-industry-for-car-sales#comments Tue, 27 Jan 2009 02:25:55 +0000 http://honestcarsales.com/applying-the-hotelling-model-is-price-competition-intense-in-the-industry-for-car-sales
Ahmaendah asked:

Car dealers are typically located close to one another, they cluster in one section of town. Interpreting this behavior with the Hotelling Model, would you say that price competition is intense in the industry for car sales? Why or why not?

I don’t think it’s intense because cars have both vertical and horizontal differentiation.

]]> http://honestcarsales.com/applying-the-hotelling-model-is-price-competition-intense-in-the-industry-for-car-sales/feed 1