Reconsider the simple Hotelling model in which consumers are uniformly distributed on the unit interval and firms

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Reconsider the simple Hotelling model in which consumers are uniformly distributed on the unit interval and firms are located at the extremes of this interval. Now take consumer’s participation constraint explicitly into account. Derive the equilibrium depending on the parameter τ. [Be careful to distinguish between different regimes with respect to competition between firms!]

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