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Network competition and branch differentiation with consumer heterogeneity

Author

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  • Jean-Claude Thill

    (Department of Geography, State University of New York at Buffalo, 117 Wilkeson Quad, Amherst NY 14261-0023, USA)

Abstract

The paper provides a general framework for the analysis of noncooperative competition between multi-branch networks when consumers have heterogeneous preferences. This framework allows for ill-studied conditions, such as branch loyalty and economies of scope, to be explored in terms of their role in shaping address solutions and firm profits. Geographic and quality differentiation as well as firm profits are shown to be dependent upon the magnitude of the loyalty factor and upon the extend of economies of scope. Real world situations in the retail industry are interpreted in the light of the results of the analysis.

Suggested Citation

  • Jean-Claude Thill, 2000. "Network competition and branch differentiation with consumer heterogeneity," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 34(3), pages 451-468.
    • Handle: RePEc:spr:anresc:v:34:y:2000:i:3:p:451-468
    Note: Received: October 1998 / Accepted: June 1999
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    Cited by:

    1. Pal, Debashis & Sarkar, Jyotirmoy, 2002. "Spatial competition among multi-store firms," International Journal of Industrial Organization, Elsevier, vol. 20(2), pages 163-190, February.
    2. Lindsey, Robin & West, Douglas S., 2003. "Predatory pricing in differentiated products retail markets," International Journal of Industrial Organization, Elsevier, vol. 21(4), pages 551-592, April.
    3. Rafael Suárez-Vega & Dolores Santos-Peñate & Pablo Dorta-González, 2014. "Location and quality selection for new facilities on a network market," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(2), pages 537-560, March.

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