Location-Spatial Interaction Models: 3. Competition between Organizations

Abstract

The model of oligopoly between N retail stores, treated in the second paper of this series, is extended to consider competition between groups or ‘chains’ within which the location and sizes of stores are coordinated to promote organizational objectives. This model of oligopolistic competition between multistore organizations is expressed through an optimization process, and an algorithm for its solution is proposed. Numerical examples are used to explore the effects of organizational structure on system profitability and accessibility benefits to consumers.