There’s the classic economic textbook example of two hot-dog vendors on a beach that need to choose their location—assuming an even distribution of customers, and that customers always choose the closest vendor; the equilibrium location is them standing right next to each other in the middle; while the “optimal” (from customer view, minimizing distance) locations would be at 25% and 75% marks. This matches the median voter principle—the optimal behavior of candidates is to be as close as possible to the median but on the “right side” to capture “their half” of the voters; even if most voters in a specific party would prefer their candidate to cater for, say, the median Republican/Democrat instead, it’s against the candidates interests to do so.
Seriously, I always wondered why I always see a Walgreens and a CVS across the street from each other. Or why I see the same with two competing chains of video stores (not that I see video stores much anymore, in this age of Netflix.)
Actually, that’s probably a different phenomenon. Stores of a similar type tend to cluster, because that’s where the customers (and, to some extent, suppliers) cluster. If you were opening a new flower stall, then 1% of the 10K potential customers in the flower market is still a better deal than 100% of the 10 potential customers on some random street corner.
That is customers can refuse to buy at all (Exit) and voters can protest instead of silent voting (Voice). Or they can support a side actively (Loyalty).
Taking this into account changes the simple economic result to one overlayed with longer term Exit/Voice trends.
There’s the classic economic textbook example of two hot-dog vendors on a beach that need to choose their location—assuming an even distribution of customers, and that customers always choose the closest vendor; the equilibrium location is them standing right next to each other in the middle; while the “optimal” (from customer view, minimizing distance) locations would be at 25% and 75% marks.
This matches the median voter principle—the optimal behavior of candidates is to be as close as possible to the median but on the “right side” to capture “their half” of the voters; even if most voters in a specific party would prefer their candidate to cater for, say, the median Republican/Democrat instead, it’s against the candidates interests to do so.
Life makes so much more sense now.
Seriously, I always wondered why I always see a Walgreens and a CVS across the street from each other. Or why I see the same with two competing chains of video stores (not that I see video stores much anymore, in this age of Netflix.)
Actually, that’s probably a different phenomenon. Stores of a similar type tend to cluster, because that’s where the customers (and, to some extent, suppliers) cluster. If you were opening a new flower stall, then 1% of the 10K potential customers in the flower market is still a better deal than 100% of the 10 potential customers on some random street corner.
Gotta agree with that. I live about 5 minutes away from 3 different supermarkets within metres of each other.
That’s true only if the voters/buyers have only exactly these choices. But in general they have more:
They can also Exit, Voice, and Loyalty ( http://en.wikipedia.org/wiki/Exit,_Voice,_and_Loyalty ).
That is customers can refuse to buy at all (Exit) and voters can protest instead of silent voting (Voice). Or they can support a side actively (Loyalty).
Taking this into account changes the simple economic result to one overlayed with longer term Exit/Voice trends.