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Seminars - ABSTRACT

Joseph Geunes, Ph.D., Associate Professor, Industrial & Systems Engineering (UF)

Title: A Competitive Location Game with Traffic Congestion Costs

Abstract: We study a set of competitive firms considering the location of uncapacitated facilities at a set of candidate locations in order to serve a set of markets. Each firm incurs firm-specific (linear) transportation costs, as well as convex congestion and fixed location costs as a result of location and distribution volume decisions. Unit price in each market is a linear decreasing function of the total amount shipped to the market by all firms; that is, we consider an oligopolistic Cournot game and analyze the two-stage Nash Equilibrium. This problem is referred to as the location-quantity game or competitive location game and we first study the supply quantity decisions of the firms for given facility location decisions, i.e., the second stage of the game. Firms may locate more than one facility, and we investigate the effects of transportation and traffic congestion costs on the supply decisions of the firms. Exact algorithms for determining equilibrium quantity decisions and an integer programming formulation are provided for the second stage of the game. Then we focus on the location decisions, i.e., the game's first stage, and provide heuristic solution approaches for finding equilibrium location decisions.


 

 

 

 

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