A COMPETITION MODEL OF SPATIAL AGGREGATION FOR DIVERSIFIED AND STANDARDIZED FACILITIES

Abstract

This paper clarifies the competitive structure of traditional retail stores, where sales of goods are characterized, and retail chains such as convenient stores, where goods are assorted but are standardized, by applying a mathematical model. In general, convenient stores have better drawing power for its efficiency. However, traditional ones become more effective in locations where convenient stores are aggregated and attract consumers with their diversity. Therefore, this paper formulates the complexity of traditional versus convenient stores by utilizing the Nested Logit Model and creates a model to show transformation processes, then, examines numerically and analytically the behaviors of the model.