Sequential Discrete p-Facility Models for Competitive Location Planning

Two new models for duopolistic competitive discrete location planning with sequential acting and variable delivered prices are introduced. If locations and prices are assumed to be set “once and for all” by the players, the resulting bilevel program is nonlinear. Under the assumption that further price adjustments are possible, i.e., that a Nash equilibrium in prices is reached, the model can be simplified to a linear discrete bilevel formulation. It is shown that in either situation players should not share any locations or markets if they strive for profit-maximization.