Location-price Game-theoretic Model and Applications in Transportation Networks

We consider location-then-price game as a two stage game of n players on the graph. Logit analysis is used to model demand distribution between competitors. The use of multinomial logit model allows to compute shares in case of n players and proceed with studying price equilibrium. Price and location equilibria are constructed using best response dynamics. We apply proposed model to Russian and Chinese airline markets and find location and price equilibria for competitive airlines.