Abstract
This study analyzes the equilibrium and optimal location of retail stores that today have to compete with mail order businesses. Here, we present a competitive location model in a one-dimensional city model, such as the Hotelling model. The model includes two competing retail stores and one mail order business, and assumes that the consumers’choice of store is modeled by the production constraint spatial interaction models. As the attraction of the mail order business increases, the two retail stores move from a central concentrated location to two separate locations, before returning to one central location. In this study, we investigate the characteristics of the equilibrium and optimal location for these stores using different parameter settings.
