ICST Institute for Computer Sciences, Social Informatics and Telecommunications Engineering
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 profits. Our findings 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.
Huang, Arthur and David Levinson (2009) Retail Location Choice with Complementary Goods: An Agent-based Model. in 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)
Nexus Working Papers;
Huang, Arthur; Levinson, David M.
Retail Location Choice with Complementary Goods: An Agent-based Model.
ICST Institute for Computer Sciences, Social Informatics and Telecommunications Engineering.
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