A bilevel uncapacitated location/pricing problem with Hotelling access costs in one-dimensional space

Series

Abstract

We formulate a spatial pricing problem as bilevel non-capacitated location: a leader first decides which facilities to open and sets service prices taking competing offers into account; then, customers make individual decisions minimizing individual costs that include access charges in the spirit of Hotelling. Both leader and customers are assumed to be risk-neutral. For non-metric costs (i.e., when access costs do not satisfy the triangle inequality), the problem is NP-hard even if facilities can be opened at no fixed cost. We describe an algorithm for solving the Euclidean 1-dimensional case (i.e., with access cost defined by the Euclidean norm on a line) with fixed opening costs and a single competing facility.

Source Title

Information Systems, Logistics, and Supply Chain

Publisher

International Conference on Information Systems, Logistics and Supply Chain

Course

Other identifiers

Book Title

Degree Discipline

Degree Level

Degree Name

Citation

Language

English