This is better explained as a Nash equilibrium. The example of shops on the street encourages similarly located shops only when there are two shops. If there ar

This is better explained as a Nash equilibrium. The example of shops on the street encourages similarly located shops only when there are two shops. If there are three or more shops each shop owner no longer wants to locate their shop in the center of the street. Instead, the final result is unstable (no Nash equilibrium). so the keep jockeying for the best location, thus speading out.