The theory of competition was initiated over forty years ago with the publication of Hotelling's seminal article [10] on Stability in Competition. However, as the title of this article suggests, Hotelling was not primarily concerned with competition per se. As is well known, Hotelling adopted a context as the framework for his analysis, and fortuitously, in so doing, he inspired the evolution of that area of location economics that has come to be called the theory of spatial However, Hotelling could easily have chosen a different context, for example, political philosophy, color spectrum or sweetness level, to motivate the basic economic problem with which he was concerned, namely the competitive role of the characteristics of goods and services. Hotelling gave special emphasis to the implications of firms controlling such characteristics for the price stability and degree of product variability in imperfect market structures. The Cournot-Bertrand-Amoroso-Edgeworth development of models of duopoly and oligopoly for homogeneous products was unsatisfactory in many important aspects. Most troublesome was the unsatisfactory (theoretical) outcome that price instability appeared as an inherent property of many forms of (non0-collusive) imperfect competition. The basic theoretical reason for the likelihood of price instability, Hotelling noted, was: One merchant can take away his rival's entire business by undercutting his price ever so slightly. Thus discontinuities appear but, a discontinuity, like a vacuum, is abhorred by nature. More typical of real situations is the case in which the quantity sold by each merchant is a continuous function of two variables, his oVwn price and his competitor's (italics mine). Quite commonly a tiny increase in price by one seller will send only a few customers to the other. It is the gradualness in the shifting of customers from one merchant to another as their prices vary independently which is ignored in the examples worked out by Cournot, Amoroso and Edgeworth. The assumption, implicit in their work,