Cournot–Stackelberg games in competitive delocation

Ruiz-Hernández, Diego; Elizalde, Javier; Delgado-Gómez, David

doi:10.1007/s10479-016-2288-z

Cited by 7 publications

(3 citation statements)

References 42 publications

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“…(2007) introduce a mixed‐integer programming model that optimizes the closing of facilities in a region so as to minimize market share lost to competitors, and Ruiz‐Hernández et al. (2017), pursuing a similar objective and observing similar constraints, employ a game theoretic approach modeling Cournot and Stackelberg games for competitive delocation. In another game theoretic model, Mayadunne et al.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The premise for these models is that because retail stores operate in a competitive environment, store closure decisions are a function not only of a retailer's existing network of stores, but also of the location of stores operated by competitors. For example, ReVelle et al ( 2007) introduce a mixed-integer programming model that optimizes the closing of facilities in a region so as to minimize market share lost to competitors, and Ruiz-Hernández et al (2017), pursuing a similar objective and observing similar constraints, employ a game theoretic approach modeling Cournot and Stackelberg games for competitive delocation. In another game theoretic model, Mayadunne et al (2018) examine the competitive downsizing decisions of two retailers and find that the firm with larger sales will push its competitor to close a greater number of unprofitable stores.…”

Section: Literature Reviewmentioning

confidence: 99%

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Impact of Competitor Store Closures on a Major Retailer

Akturk

Ketzenberg

2022

Production and Operations Management

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W e use a proprietary data set from a national US department store chain to investigate the impact of competitor store closures on a major retailer. The transaction level data set includes nearly 80 million transactions, corresponding to $2 billion in sales over a 25-month period. We find that store sales increase with respect to a store's proximity to closed competitor locations. More interestingly, we find that online channel sales also increase in geographic locations where competitors close stores and where our focal retailer has store locations in close proximity to the markets it serves. This latter finding highlights the important role that stores play in the online channel. Stores provide a level of shopping assurance generally not available online and support customer webrooming and showrooming to mitigate purchase uncertainty. Stores are also integral to omnichannel services like return-to-store wherein stores provide a convenient nearby location to make a free return should an online purchase not meet expectations. Consistent with these shopping behaviors, our results demonstrate that the focal retailer, in markets affected by competitor store closures, is able to capture demand that exhibits greater uncertainty in purchases as evidenced by (i) a disproportionate increase in riskier high value vs. low value store purchases consistent with webrooming, (ii) increased online sales of product categories associated with showrooming, and (iii) an increase in return-to-store instances for online purchases.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Impact of Competitor Store Closures on a Major Retailer

Akturk

Ketzenberg

2022

Production and Operations Management

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“…Many studies have investigated these issues, for instance iterated games with information about past strategy choices restricted by some cost (Ben-Porath and Kahneman, 2003;Flesch and Perea, 2009;Miklós-Thal and Schumacher, 2013). Other studies include the difference between Cournot or Betrand duopoly games and Stackelberg games in terms of information sharing (Ruiz-Hernández et al, 2017;Sakai, 1986), games with random information leaked revealing possible changes in strategy (Halpern and Pass, 2018), and iterated Prisoner's Dilemma with network effects (Antonioni et al, 2014). Solan and Yariv (2004) study a modification to two-player games in which one player can purchase a noisy signal correlated with the opponent's action, but has some probability of signalling a different action and misleading the player.…”

Section: Introductionmentioning

confidence: 99%

Simultaneous games with purchase of randomly supplied perfect information: Oracle Games

Young¹,

Belmonte²

2020

Preprint

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We study the role of costly information in non-cooperative two-player games when an extrinsic third party information broker is introduced asymmetrically, allowing one player to obtain information about the other player's action. This broker or "oracle" is defined by a probability of response, supplying correct information randomly; the informed player can pay more for a higher probability of response. We determine the necessary and sufficient conditions for strategy profiles to be equilibria, in terms of how both players change their strategies in response to the existence of the oracle, as determined by its cost of information function. For mixed strategy equilibria, there is a continuous change as information becomes cheaper, with clear transitions occuring at critical nodes at which pure strategies become dominated (or undominated). These nodes separate distinct responses to the information for sale, alternating between regions where the paying player increases the amount of information purchased, and regions where the other player moves away from riskier strategies, in favor of safer bets that minimize losses. We derive conditions for these responses by defining a value of information.

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