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MARKET CAPTURE BY TWO COMPETITORS: THE PREEMPTIVE LOCATION PROBLEM *
Author(s) -
Serra Daniel,
ReVelle Charles
Publication year - 1994
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.1994.tb00882.x
Subject(s) - competitor analysis , market share , business , value (mathematics) , industrial organization , microeconomics , market share analysis , market segmentation , marketing , economics , computer science , finance , market microstructure , order (exchange) , machine learning
. We consider a location and allocation game for two competitor firms, A and B, that each seek to locate p facilities in a network. A market is captured by a particular firm if that market's closest facility belongs to that firm rather than a competitor. The question is as follows: Firm A wants to locate its p facilities so that B, which enters also with p facilities after Firm A has located its facilities, will capture the minimum market value possible. That is, Firm A wishes to preempt Firm B in its bid to capture market share to the maximum extent possible. A model is presented that addresses this issue, together with solution methods and computing times.