TY - JOUR
T1 - The Follower Competitive Location Problem with Comparison-Shopping
AU - Marianov, Vladimir
AU - Eiselt, H. A.
AU - Lüer-Villagra, Armin
N1 - Funding Information:
We gratefully acknowledge the support by Grant FONDECYT 1160025 and by the Complex Engineering Systems Institute through grant CONICYT PIA FB0816.
Publisher Copyright:
© 2019, Springer Science+Business Media, LLC, part of Springer Nature.
PY - 2019/1/1
Y1 - 2019/1/1
N2 - In competitive settings, firms locate their stores to take advantage of consumers’ behavior to maximize their market share. A common behavior is comparison-shopping: in this behavioral pattern, consumers visit multiple stores that sell non-identical products, which are mutual substitutes, before making their purchase decision. This behavior has never been included in location-prescribing models for competitive firms. Given existing branches of one firm, we address the location problem of a follower firm that locates its own branches. We present insights on the instance used by ReVelle in his maximum capture formulation, provide computational experience with one thousand 100-node instances, and consider a realistic case using a 353-node network of Santiago, Chile. The results are compared in terms of the demand captured by each firm and the locational patterns that result from different consumer behaviors.
AB - In competitive settings, firms locate their stores to take advantage of consumers’ behavior to maximize their market share. A common behavior is comparison-shopping: in this behavioral pattern, consumers visit multiple stores that sell non-identical products, which are mutual substitutes, before making their purchase decision. This behavior has never been included in location-prescribing models for competitive firms. Given existing branches of one firm, we address the location problem of a follower firm that locates its own branches. We present insights on the instance used by ReVelle in his maximum capture formulation, provide computational experience with one thousand 100-node instances, and consider a realistic case using a 353-node network of Santiago, Chile. The results are compared in terms of the demand captured by each firm and the locational patterns that result from different consumer behaviors.
KW - Comparison-shopping
KW - Competitive location
KW - Follower problem
UR - http://www.scopus.com/inward/record.url?scp=85073992588&partnerID=8YFLogxK
U2 - 10.1007/s11067-019-09481-6
DO - 10.1007/s11067-019-09481-6
M3 - Article
AN - SCOPUS:85073992588
SN - 1566-113X
VL - 20
SP - 367
EP - 393
JO - Networks and Spatial Economics
JF - Networks and Spatial Economics
IS - 2
ER -
