In Canada, Tim Horton's is much more popular than Starbucks. There is one intersection I know that has THREE Tim Horton's across from each other on three of the

In Canada, Tim Horton's is much more popular than Starbucks. There is one intersection I know that has THREE Tim Horton's across from each other on three of the four corners. As you said, its to capture traffic going one way and cars/people are unlikely to cross the street so sales is effectively doubled at the three locations that it would be at one. Also this technique works for businesses that always have a line up (like Starbucks does in some places) as a distributed way to serve more customers. No one wants to wait 10 minutes for a coffee, but if there are two Starbucks across from each other they will only have to wait 5. I always thought the grouping of unrelated businesses had more to do with attracting more customers from farther away, as opposed to this Nash Equilibrium theory. So if there are five car dealerships on one street, customers will come from 50 miles away to go car shopping there instead of only one car dealer only attracting local customers. So the "car shopping street" is what people go to, not that specific dealer. I don't know if its this way everywhere, but in Toronto there is one street that sells expensive clothes (Prada, Louis Vuitton, Gucci, etc.) and all those stores are within a block of each other, one street that sells computer stuff, one street that has a lot of restaurants side-by-side-by-side, one street that has a lot of dance clubs... Is it Nash Equilibrium or is it new businesses going where their target market already is? If you want to open a dance club, do you go where there are no dance clubs, or where there are 5 others and you know there will be people on a Saturday night?