The socially optimal and equilibrium locations of two stores or libraries with consumer search

Ralph Braid ()

The Annals of Regional Science, 2014, vol. 53, issue 1, 123-136

Abstract: This paper examines the socially optimal (and also equilibrium) locations of two stores or libraries on a linear market of unit length. If each consumer has probability $$w$$ w of finding a desired product at each store, then the socially optimal locations are never completely centralized for full information, but are completely centralized for $$w \le 0.5$$ w ≤ 0.5 when costly visit search is necessary. The Nash equilibrium locations of two stores, and various alternative models for the socially optimal locations of two stores, are also examined. Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: R32; L81; D83 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/s00168-014-0620-6

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