Hotelling's Competitive Location Model with Respect to Customers' Shop Choice Behavior - Dynamics of Two Shops Location Introducing the Huã's Model -

Abstract

In this paper, the competition between two shops on a line is concerned. It is well known that the Hotelling'smodel on the stability of location of two shops on a line is the årst on this theme. It has been generalized notonly as it covers the shops more than two but it includes the various kinds of transportation costs. However, in the context of customers' shop choice behavior, only a few studies on the model have been done. So, in this study, introducing the Huã's model for customers' shop choice, we will analyze the market share maximizing behavior of two shops on a line. In our model, the location competition of two shops does not always resultsin the concentration to the center of the line. Moreover, we have classiåed the two shops' alternate move mentsby the transportation speed and the deterrent coeécient of the Huã's model. © 2003, The City Planning Institute of Japan. All rights reserved.