Why Retailers Cluster: An Agent Model of Location Choice on Supply Chains

This paper investigates the emergence of retail clusters on supply chains comprised of suppliers, retailers, and consumers. Agent-based models are employed to study retail location choice in a market of homogeneous goods and a market of complementary goods. On a circle comprised of discrete locales, retailers play a non-cooperative game by choosing locales to maximize profits which are impacted by their distance to consumers and to suppliers. The authors findings disclose that in a market of homogeneous products symmetric distributions of retail clusters rise out of competition between individual retailers; average cluster density and cluster size change dynamically as retailers enter the market. In a market of two complementary goods, multiple equilibria of retail distributions are found to be common; a single cluster of retailers has the highest probability to emerge. Overall, the authors results show that retail clusters emerge from the balance between retailers' proximity to their customers, their competitors, their complements, and their suppliers.

Language

  • English

Media Info

  • Media Type: DVD
  • Features: Figures; References; Tables;
  • Pagination: 17p
  • Monograph Title: TRB 89th Annual Meeting Compendium of Papers DVD

Subject/Index Terms

Filing Info

  • Accession Number: 01155854
  • Record Type: Publication
  • Report/Paper Numbers: 10-2503
  • Files: TRIS, TRB
  • Created Date: Jan 25 2010 11:11AM