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Spatial Location Competition Strategy of Real Estate Enterprises from the Perspective of Classic Hotelling Model

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DOI: 10.25236/icbdem.2020.066


Chao Zhou, Jie Luo, Pengfei Zhou

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Pengfei Zhou


Spatial location is an important factor in the market competition of real estate enterprises. Hotelling model is one of the most important models, which is based on different spatial locations of firms and provides an analytical framework for firms to determine their location and the nature of their spatial equilibrium in spatial location competition. The market of the real estate market is very similar to the hypothetical market of the classical Hoteling model, which has typical characteristics of spatial competition. Therefore, this paper uses the classical spatial competition model - Hotelling model to analyze the competition of real estate developers, and draws the corresponding conclusions. It is considered that the transportation cost is an important factor affecting the competition and pricing among real estate developers, and the market entry cost and the fixed cost of development also have a significant impact on the competition of developers and the pricing of housing. If the impact of transportation cost on consumers is low enough, the price of housing will be close to the cost price of development, which helps to stabilize house prices.


Real estate development; Spatial competition; Game strategy; Hotelling model