We consider a quantity-location duopoly game in a spatial discrimination model in which we assume that the delivered goods can be imperfect substitutes or complements. The paper extends the analysis by Shimizu [Economics Letters 76(2002] who provides arguments to exclude the possibility for optimal locations in Cournot linear markets to be affected by product differentiation. We show that product differentiation may indeed affect the location equilibria when they exhibit a dispersed pattern. Conditions for the existence of these equilibria are derived and the impact of differentiation is discussed in the paper.

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Spatial discrimination; Cournot competition; Optimal locations

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