IDEAS home Printed from https://ideas.repec.org/a/eee/regeco/v35y2005i6p700-714.html
   My bibliography  Save this article

Multi-store competition: Market segmentation or interlacing?

Author

Listed:
  • Janssen, Maarten C.W.
  • Karamychev, Vladimir A.
  • van Reeven, Peran

Abstract

This discussion paper led to a publication in the Regional Science and Urban Economics (2005). Vol. 35(6), pages 700-714. This paper develops a model for multi-store competition between firms. Using thefact 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. Moreover, generically, the subgame perfect equilibrium isunique and when the firms have an equal number of outlets, prices are independent of the number of outlets.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Janssen, Maarten C.W. & Karamychev, Vladimir A. & van Reeven, Peran, 2005. "Multi-store competition: Market segmentation or interlacing?," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 700-714, November.
    • Handle: RePEc:eee:regeco:v:35:y:2005:i:6:p:700-714
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0166-0462(05)00003-7
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Tore Nilssen & Lars Sørgard, 1998. "Time Schedule and Program Profile: TV News in Norway and Denmark," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(2), pages 209-235, June.
    2. Lai, Fu-Chuan, 2001. "Sequential locations in directional markets," Regional Science and Urban Economics, Elsevier, vol. 31(5), pages 535-546, September.
    3. Nilssen, Tore, 1997. "Sequential location when transportation costs are asymmetric," Economics Letters, Elsevier, vol. 54(2), pages 191-201, February.
    4. Brander, James A & Eaton, Jonathan, 1984. "Product Line Rivalry," American Economic Review, American Economic Association, vol. 74(3), pages 323-334, June.
    5. Irmen, Andreas & Thisse, Jacques-Francois, 1998. "Competition in Multi-characteristics Spaces: Hotelling Was Almost Right," Journal of Economic Theory, Elsevier, vol. 78(1), pages 76-102, January.
    6. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
    7. repec:ulb:ulbeco:2013/1759 is not listed on IDEAS
    8. de Palma, A, et al, 1985. "The Principle of Minimum Differentiation Holds under Sufficient Heterogeneity," Econometrica, Econometric Society, vol. 53(4), pages 767-781, July.
    9. d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979. "On Hotelling's "Stability in Competition"," Econometrica, Econometric Society, vol. 47(5), pages 1145-1150, September.
    10. Klemperer, Paul, 1992. "Equilibrium Product Lines: Competing Head-to-Head May Be Less Competitive," American Economic Review, American Economic Association, vol. 82(4), pages 740-755, September.
    11. Salvanes, Kjell G. & Steen, Frode & Sorgard, Lars, 2005. "Hotelling in the air? Flight departures in Norway," Regional Science and Urban Economics, Elsevier, vol. 35(2), pages 193-213, March.
    12. Ansari, A. & Economides, N. & Steckel, J., 1996. "The Max-Min-Min Principle of product Differentiation," Working Papers 96-10, New York University, Leonard N. Stern School of Business, Department of Economics.
    13. Martinez-Giralt, Xavier & Neven, Damien J, 1988. "Can Price Competition Dominate Market Segmentation?," Journal of Industrial Economics, Wiley Blackwell, vol. 36(4), pages 431-442, June.
    14. Pal, Debashis & Sarkar, Jyotirmoy, 2002. "Spatial competition among multi-store firms," International Journal of Industrial Organization, Elsevier, vol. 20(2), pages 163-190, February.
    15. Tabuchi, Takatoshi, 1994. "Two-stage two-dimensional spatial competition between two firms," Regional Science and Urban Economics, Elsevier, vol. 24(2), pages 207-227, April.
    16. Cancian, Maria & Bills, Angela & Bergstrom, Theodore, 1995. "Hotelling Location Problems with Directional Constraints: An Application to Television News Scheduling," Journal of Industrial Economics, Wiley Blackwell, vol. 43(1), pages 121-124, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gu Yiquan & Wenzel Tobias, 2012. "Price-Dependent Demand in Spatial Models," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-26, March.
    2. Eric E. Giraud-Heraud & Abdelhakim Hammoudi, 2009. "On the existence and uniqueness of price equilibrium with multi-store firms," Post-Print hal-02659530, HAL.
    3. Rostam-Afschar, Davud & Unsorg, Maximiliane, 2021. "Entry regulation and competition evidence from retail and labor markets of pharmacists," University of Tübingen Working Papers in Business and Economics 146, University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics.
    4. Bernhardt Dan & Graham Brett, 2015. "Multi-product Bertrand Oligopoly with Exogenous and Endogenous Consumer Heterogeneity," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 15(2), pages 167-209, July.
    5. Shin‐Kun Peng & Takatoshi Tabuchi, 2007. "Spatial Competition in Variety and Number of Stores," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(1), pages 227-250, March.
    6. Zhihong Chen & Zhiqi Chen, 2014. "Product Line Rivalry and Firm Asymmetry," Journal of Industrial Economics, Wiley Blackwell, vol. 62(3), pages 417-435, September.
    7. Sei Beom Won, 2017. "Two-dimensional price discrimination with uncertainty about willingness-to-pay," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 58(3), pages 513-541, May.
    8. Yiquan Gu & Alexander Rasch & Tobias Wenzel, 2016. "Price-sensitive demand and market entry," Papers in Regional Science, Wiley Blackwell, vol. 95(4), pages 865-875, November.
    9. Karamychev, Vladimir & van Reeven, Peran, 2009. "Retail sprawl and multi-store firms: An analysis of location choice by retail chains," Regional Science and Urban Economics, Elsevier, vol. 39(3), pages 277-286, May.
    10. Chung, Hwan & Lee, Eunkyu, 2017. "Store Brand Quality and Retailer’s Product Line Design," Journal of Retailing, Elsevier, vol. 93(4), pages 527-540.
    11. Iida, Tetsuya & Matsubayashi, Nobuo, 2011. "Strategic multi-store opening under financial constraint," European Journal of Operational Research, Elsevier, vol. 210(2), pages 379-389, April.
    12. Varela-Irimia, Xosé-Luís, 2011. "Multi-stage oligopoly models with nested logit demand structures: A simplifying approach," Working Papers 2072/179616, Universitat Rovira i Virgili, Department of Economics.
    13. Takaki, Masaya & Matsubayashi, Nobuo, 2013. "Sequential multi-store location in a duopoly," Regional Science and Urban Economics, Elsevier, vol. 43(3), pages 491-506.
    14. Simon Loertscher & Yves Schneider, 2005. "Switching Costs, Firm Size, and Market Structure," SOI - Working Papers 0508, Socioeconomic Institute - University of Zurich.
    15. Hammoudi Abdelhakim & Giraud-héraud Eric, 2009. "On the Existence and uniqueness of Price Equilibrium with Multi-Store Firms," Economics Bulletin, AccessEcon, vol. 29(2), pages 873-882.
    16. Vladimir A. Karamychev & Peran van Reeven, 2009. "A Monopolist in Public Transport: Undersupply or Oversupply?," Tinbergen Institute Discussion Papers 09-077/1, Tinbergen Institute.
    17. Mayadunne, Sanjaya & Johar, Monica & Saydam, Cem, 2018. "Competitive store closing during an economic downturn," International Journal of Production Economics, Elsevier, vol. 199(C), pages 162-178.
    18. Omer Ben-Porat & Moshe Tennenholtz, 2019. "Multiunit Facility Location Games," Mathematics of Operations Research, INFORMS, vol. 44(3), pages 865-889, August.
    19. Zhihong Chen & Zhiqi Chen, 2011. "Product Line Rivalry: A Further Analysis," Carleton Economic Papers 11-04, Carleton University, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yogesh V. Joshi & David J. Reibstein & Z. John Zhang, 2016. "Turf Wars: Product Line Strategies in Competitive Markets," Marketing Science, INFORMS, vol. 35(1), pages 128-141, January.
    2. Takatoshi Tabuchi, 2009. "Hotelling's Spatial Competition Reconsidered," CIRJE F-Series CIRJE-F-674, CIRJE, Faculty of Economics, University of Tokyo.
    3. Graubner, Marten & Balmann, Alfons & Sexton, Richard J., 2011. "Spatial Pricing and the Location of Processors in Agricultural Markets," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114601, European Association of Agricultural Economists.
    4. Bonein, Aurélie & Turolla, Stéphane, 2009. "Sequential location under one-sided demand uncertainty," Research in Economics, Elsevier, vol. 63(3), pages 145-159, September.
    5. Tomasz Kopczewski & Maciej Pogorzelski, 2009. "Influence of the size of the company on developing of decision-making process of the enterprise concerning the spatial location," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 23.
    6. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Multiproduct Firms, Product Differentiation, and Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
    7. Chisholm, Darlene C. & Norman, George, 2004. "Heterogeneous preferences and location choice with multi-product firms," Regional Science and Urban Economics, Elsevier, vol. 34(3), pages 321-339, May.
    8. Gupta, Barnali & Lai, Fu-Chuan & Pal, Debashis & Sarkar, Jyotirmoy & Yu, Chia-Ming, 2004. "Where to locate in a circular city?," International Journal of Industrial Organization, Elsevier, vol. 22(6), pages 759-782, June.
    9. Blanchard, Pierre & Gaigné, Carl & Mathieu, Claude, 2012. "Trade costs and international strategy of firms: The role of endogenous product differentiation," Regional Science and Urban Economics, Elsevier, vol. 42(6), pages 1023-1036.
    10. Kuangnen Cheng & Hui-Ping Chen & Jason Lee, 2015. "Competition behavior in service frequency for U.S. airlines," Service Business, Springer;Pan-Pacific Business Association, vol. 9(1), pages 1-16, March.
    11. Gaëtan Fournier & Marco Scarsini, 2014. "Hotelling Games on Networks: Efficiency of Equilibria," Documents de travail du Centre d'Economie de la Sorbonne 14033, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    12. Oz Shy & Rune Stenbacka, 2008. "Price Competition, Business Hours and Shopping Time Flexibility," Economic Journal, Royal Economic Society, vol. 118(531), pages 1171-1195, August.
    13. Lijesen, M.G., 2010. "Empirical applications of spatial competition; an interpretative literature review," Serie Research Memoranda 0006, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    14. Elizalde, Javier, 2013. "Competition in multiple characteristics: An empirical test of location equilibrium," Regional Science and Urban Economics, Elsevier, vol. 43(6), pages 938-950.
    15. Buechel, Berno & Roehl, Nils, 2015. "Robust equilibria in location games," European Journal of Operational Research, Elsevier, vol. 240(2), pages 505-517.
    16. Alan Roncoroni & Matus Medo, 2016. "Spatial firm competition in two dimensions with linear transportation costs: simulations and analytical results," Papers 1609.04944, arXiv.org.
    17. Jianhu Zhang & Changying Li, 2013. "Endogenous R&D spillover and location choice in a mixed oligopoly," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(2), pages 459-477, October.
    18. Pierre Blanchard & Carl Gaigné & Claude Mathieu, 2012. "Trade Costs and Endogenous Product Differentiation for International Firms," Erudite Working Paper 2012-07, Erudite.
    19. Wen-Jung Liang & Yen-Ju Lin & Hong Hwang, 2012. "Heterogeneous duopoly, spatially discriminatory pricing, and optimal location," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 845-860, December.
    20. Nisvan Erkal, 2010. "Hotelling’s Model of Spatial Competition," Chapters, in: Mark Blaug & Peter Lloyd (ed.), Famous Figures and Diagrams in Economics, chapter 22, Edward Elgar Publishing.

    More about this item

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D10 - Microeconomics - - Household Behavior - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:regeco:v:35:y:2005:i:6:p:700-714. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/regec .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.