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Gaming in Spatial Expansion Tracks: The Case of the Swedish Brewery Industry

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  • S Finne

    (Papyrus Mölndal AB, PO Box 213, S-431 23 Mölndal, Sweden)

  • R Laulajainen

    (Department of Human Geography, Gothenburg School of Economics, PO Box 3016, S-400 10 Gothenburg, Sweden)

Abstract

Two competitors try to maximize their respective market shares by acquiring smaller, passive companies. The heavy logistics bill and inherent scale economies in production recommend contagious expansion. This process is channeled by physical barriers and population distribution. Rationalization of production and distribution is postponed. The historical example is derived from the Swedish brewery industry. It may be seen as a game with a set of rules and some probabilistic parameters. The game is played thirty-seven times, by two persons at a time. The results span a spectrum of spatial strategies, dominated by three main types, one of which corresponds to the historical outcome. To get a firmer hold of ‘good’ strategies, the probabilistic elements are replaced by a simple indicator, the territory is abstracted into a network, and the decisionmaking sequence is analyzed deductively. The same three main types of strategy reemerge. One of them is tentatively considered to be a Nash equilibrium.

Suggested Citation

  • S Finne & R Laulajainen, 1992. "Gaming in Spatial Expansion Tracks: The Case of the Swedish Brewery Industry," Environment and Planning A, , vol. 24(7), pages 1021-1037, July.
    • Handle: RePEc:sae:envira:v:24:y:1992:i:7:p:1021-1037
    DOI: 10.1068/a241021
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    References listed on IDEAS

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    Cited by:

    1. G L Clark, 1994. "Strategy and Structure: Corporate Restructuring and the Scope and Characteristics of Sunk Costs," Environment and Planning A, , vol. 26(1), pages 9-32, January.

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