Retail Location Choice with Complementary Goods: An Agent-based Model
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Retail Location Choice with Complementary Goods: An Agent-based Model
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2009
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ICST Institute for Computer Sciences, Social Informatics and Telecommunications Engineering
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Abstract
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.
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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)
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Huang, Arthur; Levinson, David M. (2009). Retail Location Choice with Complementary Goods: An Agent-based Model. Retrieved from the University Digital Conservancy, https://hdl.handle.net/11299/179991.
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