Why Ice Cream Sellers Stand Next to Each Other Instead of Spreading Out • Hacker News Board

Re: Why Ice Cream Sellers Stand Next to Each Other Instead of Spreading Out

#61

Post by billswift » Sat, Oct 17, 2009, 9:14 AM UTC

lacker wrote: post #22

pavel_lishin wrote: post #2

But what happens when there are three ice-cream sellers?

There's no stable equilibrium. The ones on the edges are constantly incentivized to move towards the center, but at some point the guy in the middle is better off moving anywhere else. Kind of like the "divide the dollar" game.

Actually, the ones on the edges should spread out a bit, they will reduce the competition for those coming from the ends of the beach who will now have to walk further to get to another shack, and they still split the difference between themselves and the next shack. How MUCH they should spread out and what more competition will do is unstable.

Re: Why Ice Cream Sellers Stand Next to Each Other Instead of Spreading Out

#62

Post by DougBTX » Sat, Oct 17, 2009, 12:33 PM UTC

euccastro wrote: post #57

andylei wrote: post #54

Earlier quoted context omitted.

>> One dangerous assumption in the hoteling model is that there are no costs to changing your position location cost is not really necessary. think of this as a game that the ice cream sellers play before they locate. they figure, where do i place my hut to get the most business? it's at the center, no matter how many operators there are. >> another unrealistic assumption: there are only two players doesn't matter ho…

>>> doesn't matter how many players there are. suppose there's one ice cream guy. where is he going to put his ice cream hut? in the center. let's say another one shows up. where is he going to put his hut? in the center. the logic repeats. No it doesn't. With three sellers in the center, the one in the middle is close to very little people. He's in the worst possible spot and he'd better move anywhere else. So that'…

By the time you have walked half way along the beach to the icecream stalls, the distance between them will be negligible. If I walk up to three icecream stalls, I'll be right infront of three icecream stalls, so location won't matter.

I'm not sure how this aspect applies to the political senario, which is the more interesting one.

Re: Why Ice Cream Sellers Stand Next to Each Other Instead of Spreading Out

#63

Post by messel » Sat, Oct 17, 2009, 3:05 PM UTC

If your competition is selling ice cream, current market pressure forces you to innovate in a way that allows you to stand out.

Therefore having balloons or a fireworks show may attract people to your stand. Carry "healthy" only 8 brand frozen yogurt.

You need to create a market black hole that sucks people's attention to your product and it's gotta be a rich enough experience to keep their attention, for as long as you can.

Dense neutron star hot fudge should help pull folks in.

Re: Why Ice Cream Sellers Stand Next to Each Other Instead of Spreading Out

#64

Post by op12 » Sat, Oct 17, 2009, 4:25 PM UTC

joez wrote: post #43

Three men went off on a sailboat together, a physicist, a chemist, and an economist. Unfortunately they ran into a storm and the boat was wrecked on an uninhabited island. The only food they were able to rescue from the wreckage was a case of baked beans. As they got hungry, they began to wrestle with the problem of how to open the bean cans. The physicist said "I'll climb a tree and throw a can onto a rock and it'll…

To me the most striking/exciting way to extend this model and what assumption to question is the zero sum assumption.

If the equilibrium is such that both ice cream sellers stay near the median, we might also imagine that the # of customers available to both sellers depends on how far they have to walk. I don't think it's unrealistic to imagine that the # of willing customers decreases as distance to the nearest seller increases. So in the case described by the article, some of the people on both ends of the beach might decide agaist buying ice cream at all, given they have to walk half way across the beach.

This is exciting to me because it might indicate that if both sellers were to cooperate (@ .33 and .66 distances along the dimension) both sellers could be better off in the aggregate because the potential number of customers they are splittig could be larger than at the nash equilibrium described in the article.

Expading the scope beyond even the sellers, we might also imagine that as a result the entire system is better off because the average customer saves time walking by having more evenly spaced ice cream sellers. That means even if we were to imagine the demand function was completely inelastic with respect to distance to nearest seller, at the very least the customers save time on average walking to the stands. This time could more productively be used to dream, plan, create the next startup, come up with the next big idea for society, etc.

The value of cooperation, expading the pie, and not assuming a zero sum game...as an optimist, these are the themes I take away from something like this.

Re: Why Ice Cream Sellers Stand Next to Each Other Instead of Spreading Out

#65

Post by lawn » Sat, Oct 17, 2009, 5:15 PM UTC

euccastro wrote: post #57

andylei wrote: post #54

Earlier quoted context omitted.

>> One dangerous assumption in the hoteling model is that there are no costs to changing your position location cost is not really necessary. think of this as a game that the ice cream sellers play before they locate. they figure, where do i place my hut to get the most business? it's at the center, no matter how many operators there are. >> another unrealistic assumption: there are only two players doesn't matter ho…

>>> doesn't matter how many players there are. suppose there's one ice cream guy. where is he going to put his ice cream hut? in the center. let's say another one shows up. where is he going to put his hut? in the center. the logic repeats. No it doesn't. With three sellers in the center, the one in the middle is close to very little people. He's in the worst possible spot and he'd better move anywhere else. So that'…

How about moving to the edge in the center? Then he'll capture the whole side until someone else claims his place, rinse and repeat.

Re: Why Ice Cream Sellers Stand Next to Each Other Instead of Spreading Out

#66

Post by pbhjpbhj » Sat, Oct 17, 2009, 11:49 PM UTC

eru wrote: post #37

pbhjpbhj wrote: post #27

Earlier quoted context omitted.

I doubt that position is important if the 3 are directly adjacent one another, or at least not as important as say the appearance of your store front or your prices or your quality or your reputation or your display of well known logos .... If I walk all the way down the beach 3m further to get to a nicer looking icecream shop is nothing. Indeed I think I'd look at the price of the icecreams first, then the ones peop…

3 miles or 3 meter?

There should probably have been some punctuation: if I walk down the [whole length of the] beach, 3m is not much further.

Metres, not "mi" miles.

Re: Why Ice Cream Sellers Stand Next to Each Other Instead of Spreading Out

#67

Post by selven » Sun, Oct 18, 2009, 12:22 AM UTC

gus_massa wrote: post #7

pavel_lishin wrote: post #2

But what happens when there are three ice-cream sellers?

The three get together, but the middle one get no clients.

And the middle one moves to the end of the line, grabbing half the clients. Now, the problem is the same but someone else is in the middle, who then must relocate himself, ad infinitum.

Re: Why Ice Cream Sellers Stand Next to Each Other Instead of Spreading Out

#68

Post by eru » Mon, Oct 19, 2009, 12:41 PM UTC

pbhjpbhj wrote: post #66

eru wrote: post #37

Earlier quoted context omitted.

3 miles or 3 meter?

There should probably have been some punctuation: if I walk down the [whole length of the] beach, 3m is not much further. Metres, not "mi" miles.

Thanks. I am not too familiar with the non-SI systems.

Re: Why Ice Cream Sellers Stand Next to Each Other Instead of Spreading Out

#69

Post by eru » Mon, Oct 19, 2009, 12:46 PM UTC

DougBTX wrote: post #62

euccastro wrote: post #57

Earlier quoted context omitted.

>>> doesn't matter how many players there are. suppose there's one ice cream guy. where is he going to put his ice cream hut? in the center. let's say another one shows up. where is he going to put his hut? in the center. the logic repeats. No it doesn't. With three sellers in the center, the one in the middle is close to very little people. He's in the worst possible spot and he'd better move anywhere else. So that'…

By the time you have walked half way along the beach to the icecream stalls, the distance between them will be negligible. If I walk up to three icecream stalls, I'll be right infront of three icecream stalls, so location won't matter. I'm not sure how this aspect applies to the political senario, which is the more interesting one.

> I'm not sure how this aspect applies to the political senario, which is the more interesting one.

That's more difficult. For in most voting systems you have to take strategic voting into account. E.g. in a winner-takes-all systems people don't want to waste their votes, and thus the system tends towards two parties.

Re: Why Ice Cream Sellers Stand Next to Each Other Instead of Spreading Out

#70

Post by sfnhltb » Tue, Oct 20, 2009, 10:47 PM UTC

stcredzero wrote: post #28

bsaunder wrote: post #23

Earlier quoted context omitted.

If only they developed an on-line store and a delivery mechanism. It would be the optimal solution from the customer perspective (price, feature and distance). Thanks in part to the ubiqutious internet.

You might be making a joke, but you also might have something here. If you can get GPS coordinates localized down to 5 meters, then you can have a mobile app that will let you place orders in places like public parks and on the beach. The app would look up vendors in the same location who are currently "open", and present virtual storefronts for them. The app would send the name, the precise GPS coordinates and, at t…

I remember watching a program about venture capitalists and the internet bubble and some experienced VC talking about how many millions he had blown trying to get a scheme somewhat along these lines up and running. Maybe the increased prevalanced and usability of mobiles might make it more feasible, but it a massively non-trivial undertaking - certainly trying to do it from on top. Some sort of organically growing website that vendors/customers use might work, but it is one of those chicken/egg problems - unless you have customers coming to the site it is a waste of time for the vendors to have to deal with the trickle of orders from it, and until a large number of vendors are present customers will get little use from it.

One way I could see working is a widespread existing business collection/franchise spreading out into more and more products over time - so companies/organisations as diverse as interflora or starbucks might start by offering products in their core competancy online, maybe start allowing other companies to join the scheme to cover gaps in their coverage, and eventually spread out to cover a wide range of goods so the website/app grows beyond the original founder.