Abstract
THIS PAPER DEVELOPS A SPATIAL COMPETITION MODEL ASSUMING THAT A CONSUMER VISITS SEVERAL STORES COMPARING THE PRICE OF GOODS AT EACH STORE. STORES ARE ASSUMED TO I) MAXIMIZE THEIR MARKET SHARES, OR II) MAXIMIZE THEIR PROFITS, WHERE THE MARKET ARE GIVEN BY A LINE SEGMENT. IT IS FIRST SHOWN THAT IF STORES MAXIMIZE THEIR MARKET SHARES, THEY GATHER AT THE CENTER OF THE MARKET; SECOND, IF THEY MAXIMIZE THEIR PROFITS, THEY ARE SYMMETRICALLY LOCATED AT CERTAIN DISTANT POINTS FROM THE CENTER.
