An Agent-based Model of Retail Location with Complementary Goods
This paper examines the emergence of retail clusters on a supply chain network comprised of suppliers, retailers, and consumers. An agent-based model is proposed to investigate retail location distribution in a market of two complementary goods. The methodology controls for supplier locales and unit sales prices of retailers and suppliers; a consumer's willingness to patronize a retailer depends on the total travel distance of buying both goods. On a circle comprised of discrete locations, retailers play a non-cooperative game of location choice to maximize individual proÞts. Our Þndings suggest that the number of clusters in equilibrium follow a power-law distribution and that hierarchical distribution patterns are much more likely to occur than the spread-out ones. In addition, retailers of complementary goods tend to co-locate at supplier locales. Sensitivity tests on the number of retailers and retailers' sequence of moving are also performed.
|Date of creation:||2008|
|Date of revision:|
|Publication status:||Published n Complex Sciences: First International Conference, Complex 2009, Shanghai, China, February 23-25, 2009. Revised Papers, Part 1. (Lecture Notes of the Institute for Computer Sciences, Social Informatics, and Telecommunications Enginering) (ed. Jie Zhou).|
|Contact details of provider:|| Postal: Dept. of Civil Engineering, 500 Pillsbury Drive SE, Minneapolis, MN 55455|
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- Arthur Huang & David Levinson, 2008. "An agent-based retail location model on a supply chain network," Working Papers 000037, University of Minnesota: Nexus Research Group.
- Andersson, Claes & Hellervik, Alexander & Lindgren, Kristian, 2005. "A spatial network explanation for a hierarchy of urban power laws," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 345(1), pages 227-244.
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