Some Location and Price Equilibria in Facility Investment with Uncertain Demand

Roy JR, Johansson B, & Leonardi G (1984). Some Location and Price Equilibria in Facility Investment with Uncertain Demand. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-84-047

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Abstract

This paper describes the spatial distribution of customer demand, supply of customer services, and facility investment as the outcome of a three-level game-like interaction between customers (e.g., shoppers), suppliers (e.g., retailers) and developers (e.g., landlords). Suppliers in each center are assumed to compete with suppliers in all other centers. Similarly, the developers of each center compete with developers of all other centers. With this specification, multi-center equilibria of the Nash type are examined for suppliers on the one hand, and for developers on the other. Suppliers in a center decide about utilized floorspace and price level in the center. Developers of a center decide about available floorspace and rent level.

The uncertain customer demand is specified in probabilistic terms, representing the suppliers' and developers' perception of customer behavior. An approach to estimate customer response patterns is presented and discussed.

Item Type: Monograph (IIASA Working Paper)
Research Programs: Regional Issues Program (RUD)
Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 01:54
Last Modified: 21 Jul 2016 13:49
URI: http://pure.iiasa.ac.at/2471

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