Highlights ► We model location decisions for competitive firms serving a set of markets. ► Supply firms incur firm-specific transportation, congestion, and location costs. ► Each market’s price is determined by Cournot competition. ► Supply levels are characterized using a variational inequality formulation. ► Firms’ equilibrium location decisions and supply quantities are characterized.
Abstract This paper studies a set of heterogenous competitive firms simultaneously locating facilities at a set of locations to serve a set of markets. Firms incur firm-specific transportation, congestion, and location costs, and market price is linear and decreasing in the amount shipped to the market by all firms. First, firms’ market-supply decisions for given facility locations are characterized using a variational inequality formulation. Then, firms’ location decisions are analyzed. A heuristic method is provided for finding equilibrium locations, and its computational efficiency is compared to a random search method.
Competitive multi-facility location games with non-identical firms and convex traffic congestion costs
Transportation Research Part E: Logistics and Transportation Review ; 48 , 1 ; 373-385
2011-06-05
13 pages
Article (Journal)
Electronic Resource
English
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