IDEAS home Printed from https://ideas.repec.org/a/eee/jomega/v52y2015icp156-167.html
   My bibliography  Save this article

On tie breaking in competitive location under binary customer behavior

Author

Listed:
  • Pelegrín, Blas
  • Fernández, Pascual
  • García Pérez, María Dolores

Abstract

Ties in customer facility choice may occur when the customer selects the facility with maximum utility to be served. In the location literature ties in maximum utility are broken by assigning a fixed proportion of the customer demand to the facilities with maximum utility which are owned by the entering firm. This tie breaking rule does not take into account the number of tied facilities of both the entering firm and its competitors. In this paper we introduce a more realistic tie breaking rule which assigns a variable proportion of customer demand to the entering firm depending on the number of tied facilities. We present a general framework in which optimal locations for the old and the new tie breaking rules can be obtained through Integer Linear Programming formulations of the corresponding location models. The optimal locations are obtained for the old tie breaking rule for different values of the fixed proportion and a comparison with the results obtained for the new tie breaking rule is drawn with data of Spanish municipalities in a variety of scenarios. Finally, some conclusions are presented.

Suggested Citation

  • Pelegrín, Blas & Fernández, Pascual & García Pérez, María Dolores, 2015. "On tie breaking in competitive location under binary customer behavior," Omega, Elsevier, vol. 52(C), pages 156-167.
    • Handle: RePEc:eee:jomega:v:52:y:2015:i:c:p:156-167
    DOI: 10.1016/j.omega.2014.10.010
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305048314001315
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.omega.2014.10.010?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Frank Plastria & Lieselot Vanhaverbeke, 2007. "Aggregation without Loss of Optimality in Competitive Location Models," Networks and Spatial Economics, Springer, vol. 7(1), pages 3-18, March.
    2. Kilkenny, Maureen & Thisse, Jacques, 1999. "The Economics of Location: A Selective Survey," Staff General Research Papers Archive 1693, Iowa State University, Department of Economics.
    3. ReVelle, C. S. & Eiselt, H. A., 2005. "Location analysis: A synthesis and survey," European Journal of Operational Research, Elsevier, vol. 165(1), pages 1-19, August.
    4. Daniel Serra & Rosa Colomé, 2001. "articles: Consumer choice and optimal locations models: Formulations and heuristics," Papers in Regional Science, Springer;Regional Science Association International, vol. 80(4), pages 439-464.
    5. Rafael Suárez‐Vega & Dolores R. Santos‐Peñate & Pablo Dorta‐González, 2004. "Competitive Multifacility Location on Networks: the (r∣Xp)‐Medianoid Problem," Journal of Regional Science, Wiley Blackwell, vol. 44(3), pages 569-588, August.
    6. Louveaux, Francois & Thisse, Jacques-Francois & Beguin, Hubert, 1982. "Location theory and transportation costs," Regional Science and Urban Economics, Elsevier, vol. 12(4), pages 529-545, November.
    7. Plastria, Frank, 2001. "Static competitive facility location: An overview of optimisation approaches," European Journal of Operational Research, Elsevier, vol. 129(3), pages 461-470, March.
    8. Redondo, Juana L. & Fernández, José & Arrondo, Aránzazu G. & García, Inmaculada & Ortigosa, Pilar M., 2012. "Fixed or variable demand? Does it matter when locating a facility?," Omega, Elsevier, vol. 40(1), pages 9-20, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Blas Pelegrín & Pascual Fernández & María Dolores García Pérez, 2016. "Profit maximization and reduction of the cannibalization effect in chain expansion," Annals of Operations Research, Springer, vol. 246(1), pages 57-75, November.
    2. B Pelegrín-Pelegrín & P Dorta-González & P Fernández-Hernández, 2011. "Finding location equilibria for competing firms under delivered pricing," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(4), pages 729-741, April.
    3. Buechel, Berno & Roehl, Nils, 2015. "Robust equilibria in location games," European Journal of Operational Research, Elsevier, vol. 240(2), pages 505-517.
    4. Dilek, Hande & Karaer, Özgen & Nadar, Emre, 2018. "Retail location competition under carbon penalty," European Journal of Operational Research, Elsevier, vol. 269(1), pages 146-158.
    5. Haase, Knut & Hoppe, Mirko, 2008. "Standortplanung unter Wettbewerb - Teil 1: Grundlagen," Discussion Papers 2/2008, Technische Universität Dresden, "Friedrich List" Faculty of Transport and Traffic Sciences, Institute of Transport and Economics.
    6. Nicole Adler & Alfred Hakkert & Jonathan Kornbluth & Tal Raviv & Mali Sher, 2014. "Location-allocation models for traffic police patrol vehicles on an interurban network," Annals of Operations Research, Springer, vol. 221(1), pages 9-31, October.
    7. Díaz-Báñez, J.M. & Heredia, M. & Pelegrín, B. & Pérez-Lantero, P. & Ventura, I., 2011. "Finding all pure strategy Nash equilibria in a planar location game," European Journal of Operational Research, Elsevier, vol. 214(1), pages 91-98, October.
    8. Xu, Shaofeng, 2013. "Transport economies of scale and firm location," Mathematical Social Sciences, Elsevier, vol. 66(3), pages 337-345.
    9. Mahama-Musah, Fuseina & Schoutteet, Penelope & Vanhaverbeke, Lieselot, 2021. "Using online data for offline decisions: A geostatistical approach for evaluating the patronage potential of a baby-care retailer," Journal of Retailing and Consumer Services, Elsevier, vol. 62(C).
    10. Haase, Knut & Müller, Sven, 2013. "Management of school locations allowing for free school choice," Omega, Elsevier, vol. 41(5), pages 847-855.
    11. Paul Berglund & Changhyun Kwon, 2014. "Solving a Location Problem of a Stackelberg Firm Competing with Cournot-Nash Firms," Networks and Spatial Economics, Springer, vol. 14(1), pages 117-132, March.
    12. Mercedes Pelegrín & Blas Pelegrín, 2017. "Nash equilibria in location games on a network," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 39(3), pages 775-791, July.
    13. Gunhak Lee & Morton E. O'Kelly, 2009. "Exploring Locational Equilibria In A Competitive Broadband Access Market: Theoretical Modeling Approach," Journal of Regional Science, Wiley Blackwell, vol. 49(5), pages 953-975, December.
    14. Kress, Dominik & Pesch, Erwin, 2012. "Sequential competitive location on networks," European Journal of Operational Research, Elsevier, vol. 217(3), pages 483-499.
    15. Wuyang Yu, 2019. "A leader-follower model for discrete competitive facility location problem under the partially proportional rule with a threshold," PLOS ONE, Public Library of Science, vol. 14(12), pages 1-16, December.
    16. José Fernández & Blas Pelegrín & Frank Plastria & Boglárka Tóth, 2007. "Planar Location and Design of a New Facility with Inner and Outer Competition: An Interval Lexicographical-like Solution Procedure," Networks and Spatial Economics, Springer, vol. 7(1), pages 19-44, March.
    17. Rafael Suárez‐Vega & Dolores R. Santos‐Peñate & Pablo Dorta‐González, 2004. "Competitive Multifacility Location on Networks: the (r∣Xp)‐Medianoid Problem," Journal of Regional Science, Wiley Blackwell, vol. 44(3), pages 569-588, August.
    18. Blas Pelegrín & Rafael Suárez-Vega & Saúl Cano, 2012. "Isodistant points in competitive network facility location," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 20(3), pages 639-660, October.
    19. Derya Celik Turkoglu & Mujde Erol Genevois, 2020. "A comparative survey of service facility location problems," Annals of Operations Research, Springer, vol. 292(1), pages 399-468, September.
    20. Abdullah Dasci & Gilbert Laporte, 2005. "A Continuous Model for Multistore Competitive Location," Operations Research, INFORMS, vol. 53(2), pages 263-280, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jomega:v:52:y:2015:i:c:p:156-167. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/375/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.