Competitive Location and Pricing on Networks
42 Pages Posted: 28 Jan 1998
In this paper we consider a location and pricing model for a retail firm that wants to enter a spatial market where a competitor firm is already operating as a monopoly with several outlets. The entering firm seeks to determine the optimal uniform mill price and its servers' locations that maximize profits given the reaction in price of the competitor firm to its entrance. A tabu search procedure is presented to solve the model together with computational experience.
JEL Classification: C61, R32, L81, R12
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