A Numerical Approach to Deriving Long-Run Equilibrium Solutions in Spatial Positioning Models

Management Science, Vol. 38, No. 1, pp. 75-86, (1992)

Posted: 3 Jun 2016

See all articles by S Chan Choi

S Chan Choi

Rutgers Business School

Wayne S. DeSarbo

Pennsylvania State University

Patrick T. Harker

University of Pennsylvania - Operations & Information Management Department

Date Written: January 1992

Abstract

Choi, DeSarbo and Harker (1990) have recently proposed a numerical methodology for optimal product positioning and pricing under the assumption that the incumbents react only with price changes in the short run. The current note extends this methodology to include incumbents' long-run strategy of competitive product repositioning, in addition to price reactions. This note also introduces the notion of product relocation cost to the equilibrium analysis, and applies the concept of (full and partial) adjustment processes toward an equilibrium to model various strategic behavior of firms. This methodology is illustrated using an existing set of data collected for a major telecommunication equipment manufacturer.

Keywords: marketing - competitive strategy, product policy, games, noncooperative, programming, variational inequalities

Suggested Citation

Choi, S Chan and DeSarbo, Wayne S. and Harker, Patrick T., A Numerical Approach to Deriving Long-Run Equilibrium Solutions in Spatial Positioning Models (January 1992). Management Science, Vol. 38, No. 1, pp. 75-86, (1992), Available at SSRN: https://ssrn.com/abstract=2788197

S Chan Choi

Rutgers Business School ( email )

100 Rockafeller Road
Piscataway, NJ 08854
United States

HOME PAGE: http://www.business.rutgers.edu/faculty-research/directory/choi-chan

Wayne S. DeSarbo (Contact Author)

Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

Patrick T. Harker

University of Pennsylvania - Operations & Information Management Department ( email )

Philadelphia, PA 19104
United States
215-898-4715 (Phone)
215-573-2065 (Fax)

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