Sabina Buczkowska edited If_you_wait_to_do__.tex  over 7 years ago

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1.1 KEY QUESTIONS  A number of key questions will be addressed along this thesis. First, location choice models use geo-referenced data, for which choice sets have an explicit spatial component. It is thus critical to understand how to represent spatial aspect in location choice models. Second, what makes these discrete choices particularly interesting and challenging to analyze is that decisions of a particular establishment are interrelated with choices of the others. These thorny problems posed by the interdependence of decisions generally cannot be assumed away, without altering the realism of the model of establishment decision making. The conventional approaches to location selection fail by providing only a set of systematic steps for problem-solving without considering strategic interactions between the establishments in the market. One of the goals is to explore how to correctly adapt location choice models to study establishments' discrete choices when they are interrelated. Third, a firm can open a number of units and serves the market from multiple locations. Once again traditional theory and methods may not be suitable to situations wherein individual establishments instead of locating independently from each other, form a whole large organization, such as a chain facing in addition a fierce competition from other chains. There is a necessity to incorporate interactions between units within the same and competing firms.  Illustrative questions that can be answered are: How fast do the firm profit and the market power decline when the number of firms and their outlets in the market increases or when the distance to their rivals decreases? How does a firm perceive a rival store located in a very close neighborhood and how if it is located far away? What is the nature and degree of competition for each of the analyzed chain? An intensified research effort along the lines of location choices is still desirable to bring the answers to many questions of this type.