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Location Strategies Based On Discrete Choice Models: An Empirical Application To Supermarket Location

Author

Listed:
  • Ivan Arribas

    (Universitat de València)

  • J.E. Vila

    (Universitat de València)

  • J.L. Cervera

    (Devstat)

Abstract

In this paper we present a theoretic two-stage model for retailers location and consumers purchase decision. Retailers decision problem is formalized in terms of a zero-sum game, whose payoffs refers to retailers' market share and consumers decision problem is formalized in terms of a discrete choice model, based on random utilities. The theoretical models provide forecasting of equilibrium market shares and the locations to be chosen by retailers, in terms of the geographic distribution of the underlying location space (constituencies of the town), population distribution and characteristics (types) of the consumers.

Suggested Citation

  • Ivan Arribas & J.E. Vila & J.L. Cervera, 2004. "Location Strategies Based On Discrete Choice Models: An Empirical Application To Supermarket Location," Working Papers. Serie AD 2004-26, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    • Handle: RePEc:ivi:wpasad:2004-26
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    File URL: http://www.ivie.es/downloads/docs/wpasad/wpasad-2004-26.pdf
    File Function: Fisrt version / Primera version, 2004
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    Keywords

    Hotelling; Industrial Organization; Choice Model;
    All these keywords.

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