This paper examines the equilibrium production-location decisions of a Cournot–Nash duopoly game. It shows that once the strategic effects stemming from duopolistic interactions are taken into account, the equilibrium of the one-stage game may deviate from that of the two-stage game, depending on not only the characteristics of each firm's production function but also whether products are strategic substitutes or complements. It also shows that the impact of a symmetric change in market demand on location decisions of duopolistic firms may be different under the one-stage game and the two-stage game.
Relation:
Regional Science and Urban Economics 28(1), pp.123-133