TY  - JOUR
TI  - Location Choice under Spillovers
AB  - This paper introduces the location choice under spillovers game: A number of
firms choose from among a number of alternative locations. A firm’s payoff at some
location is the sum of two factors: Its location-specific idiosyncratic payoff; and the
positive spillover it receives, which is a function of the number of firms choosing the
same location. The spillover function is location-specific and monotonically increasing.
This game form can be viewed as an extension of the classic “battle of sexes” game. It
can also be used to model real-life game-theoretic situations with network effects, such
as when app users choose from alternative social media or instant messaging apps. In
our main result, we show that the location choice under spillovers game is a potential
game, and hence, it always admits a Nash equilibrium in pure strategies. We also show
that: A Nash equilibrium outcome need not be Pareto efficient. An outcome that is
Pareto efficient need not be a Nash equilibrium. And a Nash equilibrium is not
necessarily a strong equilibrium.
AU  - Caskurlu, Bugra
AU  - Ekici, Ozgun
DO  - 10.20409/berj.2022.358
PY  - 2022
JO  - Business and Economics Research Journal
VL  - 13
IS  - 1
SN  - 2619-9491
SP  - 1
EP  - 9
DB  - TRDizin
UR  - http://search/yayin/detay/533684
ER  -