A Game of the Newsvendor Problem Between a Retailer and Customers Under the Space-Time Hotelling Model

The present study deals with a newsvendor problem as a game between a retailer and homogeneous customers under the space-time Hotelling unit interval model. On the condition that the business hours of the retail store is specified, formulated is the probability that a customer can arrive at the store during its business hours and can purchase a product. The demand distribution for the product at time t during business hours is also derived. Under the proposed model, the retailer determines his order quantity on the basis of the demand distribution, and each individual customer determines whether or not she should visit the store considering the probability that she can arrive at the store during business hours and purchase a product. The Nash equilibrium of the proposed game is then clarified.