Hotelling vs. Coulter

This is a wonderful example of how Hotelling’s law is used in politics.

…Seeing an opportunity in the Hotelling Maneuver, the Right has done an amazing job of losing the battle in order to win the war. With the Left overextended (leaving room for Nader or even Dean, representing “The Democratic Wing of the Democratic Party”, to spring up) they have shifted the entire culture by re-centering the national debate around the new party positions.

Bombasts like Coulter play a vital role in making less radical bombasts (like O’Reilly) seem completely rational. Her rhetoric opens up spots on the beach for people to fill, leaving the Left in the undesirable position of defending beliefs that they don’t even hold, in order to stay in the middle.

Wikipedia has an entry on Hotelling’s Law (of course)

Suppose that there are two competing shops located along the length of a street running north and south. Each shop owner wants to locate his shop such that he maximises his own market share by drawing the largest number of customers. (In this example, the shop itself is the ‘product’ considered.) Customers are spread equally along the street. Suppose, finally, that each customer will always choose the nearest shop.

For a single shop, the optimal location is precisely halfway along the length of the street. Economically, the shop could be anywhere, because it would draw all customers anyway; socially, customers have to travel the shortest distance if the shop is in the middle.

Hotelling’s law predicts that a street with two shops will also find both shops right next to each other at the same halfway point. Each shop will serve half the market; one will draw customers from the north, the other all customers from the south.

Obviously, it would be more socially beneficial if the shops separated themselves and moved to one quarter of the way along the street from each end – each would still draw half of the customers (the northern or southern half) and the customers would enjoy a shorter travel distance. However, neither shop would be willing to do this independently, as it would then allow the other shop to relocate and capture more than half the market.

This phenomenon is present in many markets, particularly in those considered to be primarily commodities, and results in less variety for the consumer.

(via del.icio.us/revgeorge)