Joint location and pricing within a user-optimized environment

Teodora Dan (), Andrea Lodi () and Patrice Marcotte ()
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Teodora Dan: Université de Montréal
Andrea Lodi: Polytechnique Montréal
Patrice Marcotte: Université de Montréal

EURO Journal on Computational Optimization, 2020, vol. 8, issue 1, No 4, 84 pages

Abstract: Abstract In the design of service facilities, whenever the behaviour of customers is impacted by queueing or congestion, the resulting equilibrium cannot be ignored by a firm that strives to maximize revenue within a competitive environment. In the present work, we address the problem faced by a firm that makes decisions with respect to location, service levels and prices and that takes explicitly into account user behaviour. This situation is modelled as a nonlinear mathematical program with equilibrium constraints that involves both discrete and continuous variables, and for which we propose an efficient algorithm based on an approximation that can be solved for its global optimum.

Keywords: Pricing; Location pricing; Bilevel programming; Mixed-integer programming; Equilibrium; Queueing; Nonconvex; 90C11; 90C26; 90C30; 90C33 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s13675-019-00120-w

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