HOTELLINGS MAIN STREET WITH MORE THAN 2 COMPETITORS

I analyze oligopolistic competition among three or more firms located on Hotelling's (1929) Main Street and show that in contrast with Hotel ling's duopoly, the symmetric locational structure supports a noncoope rative equilibrium in prices. However, in a two-stage game of location choice in the first stage, and price choice in the second stage, ther e exists no subgame-perfect equilibrium where the whole market is serv ed. This is because, starting from any locational pattern, firms have incentives to move toward the central firm. This strong version of the Principle of Minimum Differentiation destroys the possibility of a lo cational equilibrium. The results are a direct consequence of the exis tence of boundaries in the space of location. The sharp difference bet ween these results and those of the standard circular model (whose pro duct space lacks boundaries) shows that the general use of the circula r model as an approximation to the line interval model may be unwarran ted.