On the Existence and Computation of Nash Equilibrium in Network Competitive Location Under Delivered Pricing and Price Sensitive Demand

Pelegrín Pelegrín, Blas; Fernández Hernández, Pascual; García Pérez, María Dolores

Publication:
On the Existence and Computation of Nash Equilibrium in Network Competitive Location Under Delivered Pricing and Price Sensitive Demand

dc.contributor.author	Pelegrín Pelegrín, Blas
dc.contributor.author	Fernández Hernández, Pascual
dc.contributor.author	García Pérez, María Dolores
dc.contributor.department	Estadística e Investigación Operativa
dc.date.accessioned	2024-01-28T08:15:03Z
dc.date.available	2024-01-28T08:15:03Z
dc.date.issued	2023
dc.description	©2023. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/ This document is the Accepted, version of a Published Work that appeared in final form in Networks and Spatial Economics. To access the final edited and published work see https://doi.org/10.1007/s11067-023-09598-9	es
dc.description.abstract	We address the location-price decision problem for firms that offer the same type of product and compete on delivered pricing. If firms set equilibrium prices at demand points, the problem can be seen as a location game for which the Nash equilibrium (NE) is used as solution concept. For spatially separated markets, with inelastic demand, there exists a NE and it can be found by social cost minimization, as happens in network and planar location. However, with price sensitive demand, the existence of a NE has not been proven yet and socially optimal locations may not be a NE. In this paper we show that a NE can be found in discrete and network location when demand is price sensitive. A Mixed Integer Linear Programming formulation is implemented in the best response procedure which allow to find a NE for a variety of demand functions. An empirical study with data of Spanish municipalities is performed in which the procedure is applied to 200 large size test problems with linear, quadratic, exponential and hyperbolic demand functions.	es
dc.format	application/pdf	es
dc.format.extent	18	es
dc.identifier.citation	Networks and Spatial Economics 23 (2023), 825-843
dc.identifier.doi	https://doi.org/10.1007/s11067-023-09598-9
dc.identifier.issn	1566-113X
dc.identifier.issn	1572-9427
dc.identifier.uri	http://hdl.handle.net/10201/137840
dc.language	eng	es
dc.publisher	SPRINGER	es
dc.relation	This research has been supported by the Fundación Séneca (The Agency of Science and Technology of the Region of Murcia) under the research project 19241/PI/14.	es
dc.relation.publisherversion	https://link.springer.com/article/10.1007/s11067-023-09598-9	es
dc.rights	info:eu-repo/semantics/openAccess	es
dc.rights	Attribution-NonCommercial-NoDerivatives 4.0 Internacional	*
dc.rights.uri	http://creativecommons.org/licenses/by-nc-nd/4.0/	*
dc.subject	Facility location	es
dc.subject	Discrete optimization	es
dc.subject	Nash equilibrium	es
dc.subject	Spatial competition	es
dc.subject.other	CDU::5 - Ciencias puras y naturales::51 - Matemáticas	es
dc.title	On the Existence and Computation of Nash Equilibrium in Network Competitive Location Under Delivered Pricing and Price Sensitive Demand	es
dc.type	info:eu-repo/semantics/article	es
dspace.entity.type	Publication	es