Abstract
A spatial model that incorporates store locations and city topographic features is developed for the Edmonton, Alberta, video-cassette-rental market. Bertrand-Nash equi- librium prices are computed using a grid search algorithm that maximizes goodness of fit against observed prices. The fit is improved by taking into account differences between stores in product variety, the tendency of chains to set a common price for all member stores, and the tendency of chains to set whole dollar prices. Implications for further empirical research in spatial pricing are drawn.
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