Equilibrium Analysis of Disaggregate Facility Choice Systems Subject to Congestion-Elastic Demand

Hau Leung Lee and Morris A. Cohen
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Hau Leung Lee: Stanford University, Stanford, California
Morris A. Cohen: University of Pennsylvania, Philadelphia, Pennsylvania

Operations Research, 1985, vol. 33, issue 2, 293-311

Abstract: This paper considers the impact of congestion on the spatial distribution of customer utilization of service facilities in a stochastic-dynamic environment. Previous research has assumed that the rate of demand for service is independent of the attributes of the facilities. We consider the more general case in which facility utilization is determined both by individual facility choice (based on the stochastic disaggregate choice mechanism) and by the rate of demand for service. We develop generalized results for proving that equilibria exist and describe sufficient conditions for the uniqueness and global stability of these equilibria. These conditions depend upon the elasticity of demand with respect to the level of congestion at the facilities, and on whether customers are congestion-averse or are congestion-loving. Finally, we examine special cases when these conditions are satisfied.

Keywords: 413 equilibrium of disaggregate choice; 415 spatial distribution of demand (search for similar items in EconPapers)
Date: 1985
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Persistent link: https://EconPapers.repec.org/RePEc:inm:oropre:v:33:y:1985:i:2:p:293-311

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