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Note---A Numerical Approach to Deriving Long-Run Equilibrium Solutions in Spatial Positioning Models

Author

Listed:
  • S. Chan Choi

    (Graduate School of Management, Rutgers University, Newark, New Jersey 07102-1895)

  • Wayne S. Desarbo

    (Marketing and Statistics Departments, University of Michigan, Ann Arbor, Michigan 48109)

  • Patrick T. Harker

    (Decision Sciences Department, The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104-6366)

Abstract

Choi, DeSarbo and Harker (1990) have recently proposed a numerical methodology for optimal product positioning and pricing under the assumption that the incumbents react only with price changes in the short run. The current note extends this methodology to include incumbents' long-run strategy of competitive product repositioning, in addition to price reactions. This note also introduces the notion of product relocation cost to the equilibrium analysis, and applies the concept of (full and partial) adjustment processes toward an equilibrium to model various strategic behavior of firms. This methodology is illustrated using an existing set of data collected for a major telecommunication equipment manufacturer.

Suggested Citation

  • S. Chan Choi & Wayne S. Desarbo & Patrick T. Harker, 1992. "Note---A Numerical Approach to Deriving Long-Run Equilibrium Solutions in Spatial Positioning Models," Management Science, INFORMS, vol. 38(1), pages 75-86, January.
    • Handle: RePEc:inm:ormnsc:v:38:y:1992:i:1:p:75-86
    DOI: 10.1287/mnsc.38.1.75
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    Citations

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    Cited by:

    1. Marks, Ulf G. & Albers, Sönke, 1995. "Experiments in competitive product positioning: An equilibrium analysis," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 364, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    2. Sudharshan, D. & Ravi Kumar, K. & Gruca, Thomas S., 1995. "NICHER: An approach to identifying defensible product positions," European Journal of Operational Research, Elsevier, vol. 84(2), pages 292-309, July.

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