A leader–follower game in competitive facility location

Publication year: 2012
Source: Computers & Operations Research, Volume 39, Issue 2, February 2012, Pages 437-448

Hande, Küçükaydın , Necati, Aras , İ., Kuban Altınel

We address the problem of locating new facilities of a firm or franchise that enters a market where a competitor operates existing facilities. The goal of the new entrant firm is to decide the location and attractiveness of its new facilities that maximize its profit. The competitor can react by opening new facilities, closing existing ones, and adjusting the attractiveness levels of its existing facilities, with the aim of maximizing its own profit. The demand is assumed to be aggregated at certain points in the plane and the new facilities of both the firm and the competitor can be located…