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Competitive Location Models
Competitive Location Models
 & Consumer Spatial Behaviour
Competitive Location Models
    & Consumer Spatial Behaviour

Optimisation Models and an Agent-Based Approach
Motivation & Challenges
Motivation & Challenges
  uncertainty
Motivation & Challenges
  uncertainty

   fish where
   the fish are
Motivation & Challenges
   uncertainty

    fish where
    the fish are

 complex consumer
      market
Motivation & Challenges
   uncertainty

    fish where
    the fish are

 complex consumer
      market

 extending location
      decision
Motivation & Challenges
   uncertainty        foresight models


    fish where
    the fish are

 complex consumer
      market

 extending location
      decision
Motivation & Challenges
   uncertainty        foresight models


    fish where         trends consumer
    the fish are       spatial behaviour

 complex consumer
      market

 extending location
      decision
Motivation & Challenges
   uncertainty          foresight models


    fish where           trends consumer
    the fish are         spatial behaviour

 complex consumer
                      agent-based approach
      market

 extending location
      decision
Motivation & Challenges
   uncertainty          foresight models


    fish where           trends consumer
    the fish are         spatial behaviour

 complex consumer
                      agent-based approach
      market

 extending location
                          include price
      decision
Ch 1: Introduction


                     optimization models




                   Ch 2: Competitive location                      Ch 3: Consumer
                     models with foresight                         spatial behavior
location

                                                                agent-based approach


                                                             Ch 4: An ABM approach for
                                                                 location problems
location & price




                   Ch 5: Competitive location
                       model with pricing

                                                            Ch 6: An ABM approach for
                                                              location problems with
                                                                      pricing




                                            Ch 7: Conclusions
Ch 1: Introduction


                     optimization models




                   Ch 2: Competitive location                      Ch 3: Consumer
                     models with foresight                         spatial behavior
location

                                                                agent-based approach


                                                             Ch 4: An ABM approach for
                                                                 location problems
location & price




                   Ch 5: Competitive location
                       model with pricing

                                                            Ch 6: An ABM approach for
                                                              location problems with
                                                                      pricing




                                            Ch 7: Conclusions
Ch 1: Introduction


                       optimization models




                   Ch 2: Competitive location                       Ch 3: Consumer
                     models with foresight                          spatial behavior
location

                                                                  agent-based approach


                                                              Ch 4: An ABM approach for
                                                                  location problems
location & price




                   Ch 5: Competitive location
                       model with pricing

                                                             Ch 6: An ABM approach for
                                                               location problems with
                                                                       pricing




                                             Ch 7: Conclusions
Maximal covering model
Maxmin model
Minregret model
von Stackelberg model
Computational results


! feasibility
! spatial characteristics
! number of facilities/budget
Pre-processing

 ! variable dropping
 ! variable substitution
 ! demand aggregation
Computational results


! optimality
! reduction of the model size
! speed up the solution times
Motivation & Challenges
   uncertainty          foresight models


    fish where           trends consumer
    the fish are         spatial behaviour

 complex consumer
                      agent-based approach
      market

 extending location
                          include price
      decision
Ch 1: Introduction


                       optimization models




                   Ch 2: Competitive location                       Ch 3: Consumer
                     models with foresight                          spatial behavior
location
                                                                  agent-based approach


                                                              Ch 4: An ABM approach for
                                                                  location problems
location & price




                   Ch 5: Competitive location
                       model with pricing

                                                             Ch 6: An ABM approach for
                                                               location problems with
                                                                       pricing




                                             Ch 7: Conclusions
Consumer spatial behaviour


! traditional approaches
! new trends
3 dimensions

! level of aggregation
! level of chance variation
! level of dynamism
3 dimensions

! level of aggregation
                                  ut ion
! level of chance variation
                              evol
! level of dynamism
Recent challenges
! Bounded rationality
 " cognitive map


! Complex environment
 " heterogeneity of consumers
 " non-homogeneity of goods
 " dynamism
Recent challenges
! Bounded rationality
 " cognitive map


! Complex environment
 " heterogeneity of consumers
 " non-homogeneity of goods
 " dynamism
Recent challenges
! Bounded rationality
 " cognitive map


! Complex environment
 " heterogeneity of consumers
 " non-homogeneity of goods
 " dynamism
Recent challenges
! Bounded rationality
 " cognitive map


! Complex environment
 " heterogeneity of consumers
 " non-homogeneity of goods
 " dynamism
Case study: Ghent
Motivation & Challenges
   uncertainty          foresight models


    fish where           trends consumer
    the fish are         spatial behaviour

 complex consumer
                      agent-based approach
      market

 extending location
                          include price
      decision
Ch 1: Introduction


                       optimization models




                   Ch 2: Competitive location                       Ch 3: Consumer
                     models with foresight                          spatial behavior
location

                                                                  agent-based approach


                                                              Ch 4: An ABM approach for
                                                                  location problems
location & price




                   Ch 5: Competitive location
                       model with pricing

                                                             Ch 6: An ABM approach for
                                                               location problems with
                                                                       pricing




                                             Ch 7: Conclusions
Goal

• empirical understanding
• normative understanding
! qualitative insight
• methodological advancement
virtual world
“An agent-based model is a                                     comprising


          heterogeneous agents
distributed


who    interact           over time.




  spatial
In a                    agent-based model the agents are situated in a


spatial environment                                   and are typically


          move
assumed to be able to                  in various ways across this
environment.”



                                                           - Dibble, 2006 -
agents refer to ...

   “     data behavioural methods
    bundled             &


                 entity
              representing an      constituting part of a


        computationally world”  constructed



                                                   - Tesfatsion, 2006 -
Conceptual model
Incremental development
Simulation


! decision making simulation
! solution quality assessing simulation
Motivation & Challenges
   uncertainty          foresight models


    fish where           trends consumer
    the fish are         spatial behaviour

 complex consumer
                      agent-based approach
      market

 extending location
                          include price
      decision
Ch 1: Introduction


                       optimization models




                   Ch 2: Competitive location                       Ch 3: Consumer
                     models with foresight                          spatial behavior
location

                                                                  agent-based approach


                                                              Ch 4: An ABM approach for
                                                                  location problems
location & price




                   Ch 5: Competitive location
                       model with pricing

                                                             Ch 6: An ABM approach for
                                                               location problems with
                                                                       pricing




                                             Ch 7: Conclusions
Revenue maximisation model
Computational results

! optimality
! feasibility
Ch 1: Introduction


                       optimization models




                   Ch 2: Competitive location                       Ch 3: Consumer
                     models with foresight                          spatial behavior
location

                                                                  agent-based approach


                                                              Ch 4: An ABM approach for
                                                                  location problems
location & price




                   Ch 5: Competitive location
                       model with pricing

                                                             Ch 6: An ABM approach for
                                                               location problems with
                                                                       pricing




                                             Ch 7: Conclusions
Motivation & Challenges
   uncertainty          foresight models


    fish where           trends consumer
    the fish are         spatial behaviour

 complex consumer
                      agent-based approach
      market

 extending location
                          include price
      decision
In summary
  uncertainty          foresight models


   fish where           trends consumer
   the fish are         spatial behaviour

complex consumer
                     agent-based approach
     market

extending location
                         include price
     decision
Thank you!



Illustrations
Shutterstock.com except Prada Marfa by M. Astor, Mental
Map by M. Dance, Delhaize by Delhaize, Delhaize City by me
& Bazinga by Alaska Button Company

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Phd Defense

  • 1.
  • 2.
  • 4. Competitive Location Models & Consumer Spatial Behaviour
  • 5. Competitive Location Models & Consumer Spatial Behaviour Optimisation Models and an Agent-Based Approach
  • 6.
  • 7.
  • 8.
  • 9.
  • 10.
  • 11.
  • 13. Motivation & Challenges uncertainty
  • 14. Motivation & Challenges uncertainty fish where the fish are
  • 15. Motivation & Challenges uncertainty fish where the fish are complex consumer market
  • 16. Motivation & Challenges uncertainty fish where the fish are complex consumer market extending location decision
  • 17. Motivation & Challenges uncertainty foresight models fish where the fish are complex consumer market extending location decision
  • 18. Motivation & Challenges uncertainty foresight models fish where trends consumer the fish are spatial behaviour complex consumer market extending location decision
  • 19. Motivation & Challenges uncertainty foresight models fish where trends consumer the fish are spatial behaviour complex consumer agent-based approach market extending location decision
  • 20. Motivation & Challenges uncertainty foresight models fish where trends consumer the fish are spatial behaviour complex consumer agent-based approach market extending location include price decision
  • 21. Ch 1: Introduction optimization models Ch 2: Competitive location Ch 3: Consumer models with foresight spatial behavior location agent-based approach Ch 4: An ABM approach for location problems location & price Ch 5: Competitive location model with pricing Ch 6: An ABM approach for location problems with pricing Ch 7: Conclusions
  • 22. Ch 1: Introduction optimization models Ch 2: Competitive location Ch 3: Consumer models with foresight spatial behavior location agent-based approach Ch 4: An ABM approach for location problems location & price Ch 5: Competitive location model with pricing Ch 6: An ABM approach for location problems with pricing Ch 7: Conclusions
  • 23. Ch 1: Introduction optimization models Ch 2: Competitive location Ch 3: Consumer models with foresight spatial behavior location agent-based approach Ch 4: An ABM approach for location problems location & price Ch 5: Competitive location model with pricing Ch 6: An ABM approach for location problems with pricing Ch 7: Conclusions
  • 28. Computational results ! feasibility ! spatial characteristics ! number of facilities/budget
  • 29. Pre-processing ! variable dropping ! variable substitution ! demand aggregation
  • 30.
  • 31.
  • 32. Computational results ! optimality ! reduction of the model size ! speed up the solution times
  • 33. Motivation & Challenges uncertainty foresight models fish where trends consumer the fish are spatial behaviour complex consumer agent-based approach market extending location include price decision
  • 34. Ch 1: Introduction optimization models Ch 2: Competitive location Ch 3: Consumer models with foresight spatial behavior location agent-based approach Ch 4: An ABM approach for location problems location & price Ch 5: Competitive location model with pricing Ch 6: An ABM approach for location problems with pricing Ch 7: Conclusions
  • 35.
  • 36. Consumer spatial behaviour ! traditional approaches ! new trends
  • 37. 3 dimensions ! level of aggregation ! level of chance variation ! level of dynamism
  • 38. 3 dimensions ! level of aggregation ut ion ! level of chance variation evol ! level of dynamism
  • 39. Recent challenges ! Bounded rationality " cognitive map ! Complex environment " heterogeneity of consumers " non-homogeneity of goods " dynamism
  • 40.
  • 41.
  • 42. Recent challenges ! Bounded rationality " cognitive map ! Complex environment " heterogeneity of consumers " non-homogeneity of goods " dynamism
  • 43.
  • 44. Recent challenges ! Bounded rationality " cognitive map ! Complex environment " heterogeneity of consumers " non-homogeneity of goods " dynamism
  • 45.
  • 46.
  • 47. Recent challenges ! Bounded rationality " cognitive map ! Complex environment " heterogeneity of consumers " non-homogeneity of goods " dynamism
  • 48.
  • 50. Motivation & Challenges uncertainty foresight models fish where trends consumer the fish are spatial behaviour complex consumer agent-based approach market extending location include price decision
  • 51. Ch 1: Introduction optimization models Ch 2: Competitive location Ch 3: Consumer models with foresight spatial behavior location agent-based approach Ch 4: An ABM approach for location problems location & price Ch 5: Competitive location model with pricing Ch 6: An ABM approach for location problems with pricing Ch 7: Conclusions
  • 52. Goal • empirical understanding • normative understanding ! qualitative insight • methodological advancement
  • 53. virtual world “An agent-based model is a comprising heterogeneous agents distributed who interact over time. spatial In a agent-based model the agents are situated in a spatial environment and are typically move assumed to be able to in various ways across this environment.” - Dibble, 2006 -
  • 54. agents refer to ... “ data behavioural methods bundled & entity representing an constituting part of a computationally world” constructed - Tesfatsion, 2006 -
  • 57.
  • 58.
  • 59. Simulation ! decision making simulation ! solution quality assessing simulation
  • 60.
  • 61. Motivation & Challenges uncertainty foresight models fish where trends consumer the fish are spatial behaviour complex consumer agent-based approach market extending location include price decision
  • 62. Ch 1: Introduction optimization models Ch 2: Competitive location Ch 3: Consumer models with foresight spatial behavior location agent-based approach Ch 4: An ABM approach for location problems location & price Ch 5: Competitive location model with pricing Ch 6: An ABM approach for location problems with pricing Ch 7: Conclusions
  • 65. Ch 1: Introduction optimization models Ch 2: Competitive location Ch 3: Consumer models with foresight spatial behavior location agent-based approach Ch 4: An ABM approach for location problems location & price Ch 5: Competitive location model with pricing Ch 6: An ABM approach for location problems with pricing Ch 7: Conclusions
  • 66.
  • 67. Motivation & Challenges uncertainty foresight models fish where trends consumer the fish are spatial behaviour complex consumer agent-based approach market extending location include price decision
  • 68. In summary uncertainty foresight models fish where trends consumer the fish are spatial behaviour complex consumer agent-based approach market extending location include price decision
  • 69.
  • 70.
  • 71. Thank you! Illustrations Shutterstock.com except Prada Marfa by M. Astor, Mental Map by M. Dance, Delhaize by Delhaize, Delhaize City by me & Bazinga by Alaska Button Company