Competitive Location with Random Utilities

André de Palma (), Victor Ginsburgh, Martine Labbé and Jacques Thisse
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Martine Labbé: Erasmus University Rotterdam, Rotterdam, The Netherlands

Transportation Science, 1989, vol. 23, issue 4, 244-252

Abstract: This paper studies m firms competing on location over a finite subset of vertices of a graph, with the aim of attracting consumers located at some vertices of this graph. It is shown that firm i ( i = 1, ..., m ) wants to establish its m i facilities at the m i -median of the graph whose vertices are weighted by consumers' purchasing power provided that consumers' tastes are sufficiently dispersed in probabilistic terms among the different firms. Examples based on some standard network configurations illustrate the property.

Date: 1989
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http://dx.doi.org/10.1287/trsc.23.4.244 (application/pdf)

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Working Paper: Competitive location with random utilities (1990)
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ortrsc:v:23:y:1989:i:4:p:244-252

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