Differentiated products with R&D

This paper looks to the literature on one-dimensional, location models and adds to it a simple process of research and development. Differentiated-products models have often included sequential entry in order to add realism, but the order entry is known. Here, t he order is not known a priori. Also, interim profits are not ignored, allowing the monopoly profits to affect the outcome. It is found tha t firms do not necessarily locate at the extrema, but often race for t he optimal monopoly variety--the midpoint of the interval. Copyright 1993 by Blackwell Publishing Ltd.