Eﬀects of timing and multiple entries in hotelling : a one-sided and two-sided market analysis
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- Master Thesis 
The purpose of this paper has been to study how timing and multiple entries aﬀect the equilibrium outcome in a Hotelling model for one-sided and two-sided markets. After reviewing relevant theory, we present two models: a location-cum-consumer-price model (one-sided market), and a location-cum-advertisement-price model (two-sided market). In the models, the ﬁrms, choosing locations on the Hotelling line when entering and then prices, either make their location-decision simultaneously, or one by one. These two models, both with and without sequential location-decisions, has been solved using numerical analysis. The equilibrium outcomes have been analyzed using the Herﬁndahl Hirschman Index, a Locational Asymmetry Index, and by looking at consumer surplus loss due to transportation costs. We ﬁnd that increasing the number of ﬁrms generally lead to a more socially optimal outcome. When allowing for sequential entry, some ﬁrms manage to take advantage of the locational structure. We observe, however, that it does not always pay to move ﬁrst.