Competitive location and pricing on a line with metric transportation costs

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buir.contributor.authorPınar, Mustafa Ç.
dc.citation.epage200en_US
dc.citation.issueNumber1en_US
dc.citation.spage188en_US
dc.citation.volumeNumber282en_US
dc.contributor.authorArbib, C.
dc.contributor.authorPınar, Mustafa Ç.
dc.contributor.authorTonelli, M.
dc.date.accessioned2021-02-20T16:57:15Z
dc.date.available2021-02-20T16:57:15Z
dc.date.issued2020-04-01
dc.departmentDepartment of Industrial Engineeringen_US
dc.description.abstractConsider a three-level non-capacitated location/pricing problem: a firm first decides which facilities to open, out of a finite set of candidate sites, and sets service prices with the aim of revenue maximization; then a second firm makes the same decisions after checking competing offers; finally, customers make individual decisions trying to minimize costs that include both purchase and transportation. A restricted two-level problem can be defined to model an optimal reaction of the second firm to known decision of the first. For non-metric costs, the two-level problem corresponds to Envy-free Pricing or to a special Net- work Pricing problem, and is APX -complete even if facilities can be opened at no fixed cost. Our focus is on the metric 1-dimensional case, a model where customers are distributed on a main communica- tion road and transportation cost is proportional to distance. We describe polynomial-time algorithms that solve two- and three-level problems with opening costs and single 1 st level facility. Quite surpris- ingly, however, even the two-level problem with no opening costs becomes N P -hard when two 1 st level facilities are considered.en_US
dc.embargo.release2022-04-01
dc.identifier.doi10.1016/j.ejor.2019.08.042en_US
dc.identifier.issn0377-2217
dc.identifier.urihttp://hdl.handle.net/11693/75514
dc.language.isoEnglishen_US
dc.publisherElsevieren_US
dc.relation.isversionofhttps://doi.org/10.1016/j.ejor.2019.08.042en_US
dc.source.titleEuropean Journal of Operational Researchen_US
dc.subjectPricingen_US
dc.subjectLocationen_US
dc.subjectSequential gamesen_US
dc.subjectMulti-level programmingen_US
dc.subjectComputational complexityen_US
dc.titleCompetitive location and pricing on a line with metric transportation costsen_US
dc.typeArticleen_US
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