Multi-store Competition: Market Segmentation or Interlacing
November 2005
Article
volume 35, issue 6 pp 700-714.
| Related Files |
|---|
View PDF Version
(MultiStoreProof.pdf, 0.2MB) |
Repository contains one additional file which is not publicly available
This paper develops a model for multi-store competition between firms. Using the fact that different firms have different outlets and produce horizontally differentiated goods, we obtain a pure strategy equilibrium where firms choose a different location for each outlet and firms' locations are interlaced. The location decisions of multi-store firms are completely independent of each other. Firms choose locations that minimize transportation costs of consumers. Moreover, generically, the subgame perfect equilibrium is unique and when the firms have an equal number of outlets, prices are independent of the number of outlets.
Keywords
Classifications using
Journal of Economic Literature (JEL) Classification System
- I18 : Government Policy; Regulation; Public Health
- Z13 : Social Norms and Social Capital; Social Networks
- E10 : General Aggregative Models: General
Automatically Extracted Terms
- outlet
- location
- price
- equilibrium
- number
- transportation costs
- consumer
- transportation
- stage
- proposition
- profit
- chain
- function
- economic
- demand
- model
- distribution
- competition
- science
- product
