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Stability of utility functions and apportionment rules in location models

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Abstract

This paper investigates how demand is apportioned to facilities by customers, given that they apply one of a number of utility functions according to which they satisfy their demand at the facilities. After delineating the basic decision-making process, a number of reasonable assumptions are formulated regarding the behavior of the utility functions after a scaling of their different parameters. The individual apportionment rules are examined so as to whether or not they satisfy these assumptions. The results are of importance for decision-makers that must use these utility functions when facing locational decisions.

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  1. Quasi Universal Intergalactic Denomination, designed by scientists from the National Space Centre and the University of Leicester.

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Acknowledgements

The authors would like to acknowledge the helpful comments of an anonymous referee. Professor Marianov gratefully acknowledges the support by Grants FONDECYT 1190064 and CONICYT PIA AFB180003.

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Authors and Affiliations

  1. Faculty of Business Administration, University of New Brunswick, Fredericton, NB, Canada

    H. A. Eiselt

  2. Department of Electrical Engineering, Instituto Sistemas Complejos de Ingeniería (ISCI), Pontificia Universidad Católica de Chile, Santiago, Chile

    Vladimir Marianov

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  1. H. A. Eiselt
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  2. Vladimir Marianov
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Correspondence to Vladimir Marianov.

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Eiselt, H.A., Marianov, V. Stability of utility functions and apportionment rules in location models. TOP 28, 772–792 (2020). https://doi.org/10.1007/s11750-020-00569-8

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