3 ms·
I think a lot of it is the result of Hotelling's law. It is a principle rooted in game theory that explains why similar businesses clump together (ex: the McDo
by GuB-42 4y ago
I think a lot of it is the result of Hotelling's law.
It is a principle rooted in game theory that explains why similar businesses clump together (ex: the McDonald's next to the Burger King). It it exemplified by the ice cream stand problem: two competing ice cream stands on a beach front, similar in every way so that proximity is the only criteria for customers to choose which stand they will go to. Both stands will chose to go towards the center in order to maximize their area of influence. In the end, both stands will be at the center, even though it is not the best for customers, because neither have an incentive to leave the center.