3 ms·

I'm surprised that this article doesn't mention Hotelling's law (https://en.wikipedia.org/wiki/Hotelling%27s_law https://en.wikipedia.org/wiki/Hotelling%27s_law

• TheSpiceIsLife 9y ago
  I like to encourage people to provide more information about a link. From the referred Wikipedia article: Suppose that there are two competing shops located along the length of a street running north and south, with customers spread equally along the street. Each shop owner wants to locate his shop such that he maximises his own market share by drawing the largest number of customers. In this example, the shop itself is the 'product' considered and both products are equal in quality and price. There is no difference in product to the customers. Therefore, each customer will always choose the nearest shop because there is no difference in product or price. Another example of the law in action or practice is to think of two food pushcarts at a beach. Assume one starts at the south end of the beach and one starts at the north. Again assuming a rational consumer and equal distribution along the beach, each cart will get 50% of the customers, divided along an invisible line equidistant from the carts. But, each cart owner will be tempted to push his cart slightly towards the other, in order to move the invisible line so that it encompasses more than 50% of the beach. Eventually, the pushcart operators end up next to each other in the center of the beach.