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On Nash equilibria of a competitive location-design problem

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  • Sáiz, M. Elena
  • Hendrix, Eligius M.T.
  • Pelegrín, Blas

Abstract

The location-quality decision of a facility for two competing suppliers in a new market is described by a Huff-like attraction model where the profit that can be reached by each supplier depends on the actions of its competitor. We study the profit maximization problem of the suppliers under binary and proportional customer choice rules, assuming that they make their decisions simultaneously. The main questions are: what are the possible Nash equilibria in such a situation, how are they characterised and by which computational methods can they be determined? We report on findings.

Suggested Citation

  • Sáiz, M. Elena & Hendrix, Eligius M.T. & Pelegrín, Blas, 2011. "On Nash equilibria of a competitive location-design problem," European Journal of Operational Research, Elsevier, vol. 210(3), pages 588-593, May.
    • Handle: RePEc:eee:ejores:v:210:y:2011:i:3:p:588-593
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    References listed on IDEAS

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    1. H. A. Eiselt & Gilbert Laporte & Jacques-François Thisse, 1993. "Competitive Location Models: A Framework and Bibliography," Transportation Science, INFORMS, vol. 27(1), pages 44-54, February.
    2. Plastria, Frank, 2001. "Static competitive facility location: An overview of optimisation approaches," European Journal of Operational Research, Elsevier, vol. 129(3), pages 461-470, March.
    3. Fernandez, Jose & Pelegri'n, Blas & Plastria, Frank & Toth, Boglarka, 2007. "Solving a Huff-like competitive location and design model for profit maximization in the plane," European Journal of Operational Research, Elsevier, vol. 179(3), pages 1274-1287, June.
    4. J. Redondo & J. Fernández & I. García & P. Ortigosa, 2010. "Heuristics for the facility location and design (1|1)-centroid problem on the plane," Computational Optimization and Applications, Springer, vol. 45(1), pages 111-141, January.
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    Cited by:

    1. Dilek, Hande & Karaer, Özgen & Nadar, Emre, 2018. "Retail location competition under carbon penalty," European Journal of Operational Research, Elsevier, vol. 269(1), pages 146-158.
    2. Eligius M. T. Hendrix, 2016. "On competition in a Stackelberg location-design model with deterministic supplier choice," Annals of Operations Research, Springer, vol. 246(1), pages 19-30, November.

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