MARKET CAPTURE BY 2 COMPETITORS - THE PREEMPTIVE LOCATION PROBLEM

We consider a location and allocation game for two competitor firms, A and B, that each seek to locate p facilities in a network. A market i s captured by a particular firm if that market's closest facility belo ngs to that firm rather than a competitor. The question is as follows: Firm A wants to locate its p facilities so that B, which enters also with p facilities after Firm A has located its facilities, will captur e the minimum market value possible. That is, Firm A wishes to preempt Firm B in its bid to capture market share to the maximum extent possi ble. A model is presented that addresses this issue, together with sol ution methods and computing times.