eprintid: 16772
rev_number: 16
eprint_status: archive
userid: 2744
dir: disk0/00/01/67/72
datestamp: 2014-04-17 12:47:54
lastmod: 2015-04-23 15:51:00
status_changed: 2014-04-17 12:47:54
type: workingPaper
metadata_visibility: show
creators_name: Kauffeldt, Florian
creators_name: Wiesenfarth, Boris
title: Confidence, Pessimism and their Impact on Product Differentiation in a Hotelling Model with Demand Location Uncertainty
subjects: 330
divisions: 181000
keywords: Hotelling, Confidence, Optimism, Pessimism, Degree of Ambiguity, Choquet Expected Utility, Neo-additive Capacities, Product Differentiation
abstract: We analyze a Hotelling location-then-price duopoly game under demand uncertainty with uniformly distributed consumers in a standard quadratic costs scenario. The novelty of our approach consists of assuming that firms' beliefs are represented by non-extreme-outcome-additive (neo-additive) capacities. We derive firms' subgame-perfect product design decisions under ambiguity. Furthermore, we
investigate the influence of ambiguity and ambiguity attitude on equilibrium product differentiation and contrast our results with an environment of risky firms. We find that the impact of the degree of confidence or ambiguity is particularly significant when it comes to delivering accurate explanations for a wide range of phenomena related to observed product design behavior.
date: 2014-04
id_scheme: DOI
id_number: 10.11588/heidok.00016772
schriftenreihe_cluster_id: sr-3
schriftenreihe_order: 0562
ppn_swb: 1655503871
own_urn: urn:nbn:de:bsz:16-heidok-167726
language: eng
bibsort: KAUFFELDTFCONFIDENCE201404
full_text_status: public
series: Discussion Paper Series / University of Heidelberg, Department of Economics
volume: 0562
pages: 49
citation:   Kauffeldt, Florian ; Wiesenfarth, Boris  (2014) Confidence, Pessimism and their Impact on Product Differentiation in a Hotelling Model with Demand Location Uncertainty.  [Working paper]     
document_url: https://archiv.ub.uni-heidelberg.de/volltextserver/16772/1/kauffeldt_wiesenfarth_2014_dp562.pdf