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Competitive Location and Pricing on Networks
Author(s) -
Serra Daniel,
ReVelle Charles
Publication year - 1999
Publication title -
geographical analysis
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 65
eISSN - 1538-4632
pISSN - 0016-7363
DOI - 10.1111/gean.1999.31.1.109
Subject(s) - monopoly , tabu search , mill , industrial organization , microeconomics , business , computer science , economics , operations research , engineering , mechanical engineering , artificial intelligence
In this paper we consider a location and pricing model for a retail firm that wants to enter a spatial market tvhere a competitor firm is already operating as a monopoly with several outlets. The entering firm seeks to determine the optimal uniform mill price and its servers' locations that maximize profits given the reaction in price of the competitor firm to its entrance. A tabu search procedure is presented to solve the model together with computational experience and an example.