Publication:
Hotelling meets Holmes : the importance of returns to product differentiation and distribution economies for the firm's optimal location choice

Simple item page
dc.affiliation.dptoUC3M. Departamento de Economíaes
dc.contributor.authorErdmann, Anett
dc.contributor.editorUniversidad Carlos III de Madrid. Departamento de Economíaes
dc.date.accessioned2014-10-10T12:27:57Z
dc.date.available2014-10-10T12:27:57Z
dc.date.issued2014-06-01es
dc.description.abstractInspired by the empirical work of Holmes (2011), which suggests the economic importance of distribution costs in the firm's optimal location decision, this paper introduces endogenous distribution costs in the model of Hotelling (1929). The proposed model shows an interesting trade-off between demand and cost considerations when a firm plays a hybrid location strategy. Given the location of local distribution centers and agents' displacement cost parameters, it is shown that, under certain conditions, the optimal location of the firms are in the interior of the Hotelling line rather than at the edges of the line. The supply cost effect which drives this result diminishes with the distance of the distribution center from the market so that the scale of the distribution area becomes also determinant for an optimal location strategy. The theoretical results are complemented with an empirical analysis for distribution intensive grocery retailers using location data for the two main conventional supermarket chains in the U.S. The data suggest that the firms consider distribution costs when differentiating from the competitor.en
dc.format.mimetypeapplication/pdf
dc.identifier.issn2340-5031
dc.identifier.repecwe1420
dc.identifier.urihttps://hdl.handle.net/10016/19468
dc.identifier.uxxiDT/0000001281
dc.language.isoengen
dc.relation.ispartofseriesUC3M Working Papers Economicsen
dc.relation.ispartofseries14-20
dc.rightsAtribución-NoComercial-SinDerivadas 3.0 España*
dc.rights.accessRightsopen accessen
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/es/*
dc.subject.jelL13
dc.subject.jelL22
dc.subject.jelL81
dc.subject.jelD43
dc.subject.jelR10
dc.subject.jelR30
dc.subject.otherFirm strategyen
dc.subject.otherProduct differentiationen
dc.subject.otherDistribution costsen
dc.subject.otherPrice competitionen
dc.subject.otherLocation choiceen
dc.subject.otherRetail competitionen
dc.titleHotelling meets Holmes : the importance of returns to product differentiation and distribution economies for the firm's optimal location choiceen
dc.typeworking paper*
dc.type.hasVersionSMUR*
dspace.entity.typePublication
Files
Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
we1420.pdf
Size:
1.53 MB
Format:
Adobe Portable Document Format
Download
Collections
DE - Working Papers. Economics. WE