The effect of sequential entry on choice of location

Abstract An important aspect of economics arises when entry into a market of differentiated products is sequential and essentially irrevocable. An approach to the investigation of this problem is offered by the theory of spatial competition. We consider a market consisting of a line segment or its equivalent and assume irrevocable location choices for all sellers, each of whom pursues a ‘maximin’ strategy in selecting a location, and negative elasticity of demand for all buyers. Results for small N are generalised to any finite N and the patterns are evaluated on a criterion of ‘Buyers' Welfare’.