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Location and Pricing Decisions of a MultiStore Monopoly in a Spatial Market

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  • Abdullah Dasci
  • Gilbert Laporte

Abstract

. This article presents an analysis of location and pricing decisions of a monopolist about to open several stores in a compact geographical space. The number of stores is made endogenous by the introduction of fixed costs. A novel methodology is developed, by which the firm's location and price decisions are represented as continuous functions defined over the geographical space. This modeling artifact generates a negligible error but simplifies the solution considerably and allows the derivation of several intuitive results. Although the focus is on one‐dimensional markets, it is shown that the method can easily be adapted to two‐dimensional markets.

Suggested Citation

  • Abdullah Dasci & Gilbert Laporte, 2004. "Location and Pricing Decisions of a MultiStore Monopoly in a Spatial Market," Journal of Regional Science, Wiley Blackwell, vol. 44(3), pages 489-515, August.
    • Handle: RePEc:bla:jregsc:v:44:y:2004:i:3:p:489-515
    DOI: 10.1111/j.0022-4146.2004.00346.x
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    Cited by:

    1. David Meintrup & Chang Woon Nam, 2009. "Shadow Market Area for Air Pollutants," Environment and Planning B, , vol. 36(4), pages 664-681, August.
    2. Doriani Lingga & Damiana Simanjuntak, 2022. "Location Choice of a Partially–Private Monopoly Supplier," Studies in Microeconomics, , vol. 10(1), pages 106-121, June.
    3. Dasci, Abdullah & Huang, Rongbing, 2017. "A continuous approximation method for dynamic pricing problem under costly price modifications," Omega, Elsevier, vol. 72(C), pages 38-49.
    4. Azad, Nader & Hassini, Elkafi, 2019. "Recovery strategies from major supply disruptions in single and multiple sourcing networks," European Journal of Operational Research, Elsevier, vol. 275(2), pages 481-501.
    5. Mengying Xue & Long He, 2020. "Spatial pricing and product allocation in online retailing," Naval Research Logistics (NRL), John Wiley & Sons, vol. 67(8), pages 670-684, December.
    6. Aboolian, Robert & Berman, Oded & Krass, Dmitry, 2007. "Competitive facility location and design problem," European Journal of Operational Research, Elsevier, vol. 182(1), pages 40-62, October.
    7. Ebrahim Teimoury & Mohammad Modarres & Morteza Neishaboori, 2020. "Cost-based differential pricing for a make-to-order production system in a competitive segmented market," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 19(4), pages 266-275, August.
    8. Granot, Daniel & Granot, Frieda & Raviv, Tal, 2010. "On competitive sequential location in a network with a decreasing demand intensity," European Journal of Operational Research, Elsevier, vol. 205(2), pages 301-312, September.
    9. Chen, Yenming J. & Chen, Tsung-Hui, 2019. "Fair sharing and eco-efficiency in green responsibility and green marketing policy," International Journal of Production Economics, Elsevier, vol. 217(C), pages 232-245.
    10. R Aboolian & O Berman & D Krass, 2008. "Optimizing pricing and location decisions for competitive service facilities charging uniform price," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(11), pages 1506-1519, November.
    11. Zhang, Yue, 2015. "Designing a retail store network with strategic pricing in a competitive environment," International Journal of Production Economics, Elsevier, vol. 159(C), pages 265-273.

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