Many fuel pumps are also located next to each other, if I say, I did a google search to find out why competing brands are located next to each other . The Nash Equilibrium, or the sequence of events where both are located in the middle of the map, is described by game theorists as the result of this phenomenon .
I always find a Burger King outlet next door or within 50 meters of it when I go to a Mc Donalds to have my favorite burger, but I don't mind if it's in a shopping district because most major outlets have food court space in a mall, but these are also open spaces, as shown by the pictures below.You may have seen a group of car dealers, I'm sure.Many fuel pumps are also located next to each other, if I say, I did a google search to find out why competing brands are located next to each other.I suppose we have two petrol pumps at the end of a highway, say BPCL and IOC.It would be logical, since the right hand side will go to BPCL, while the left will go to IOC.Customers from the center would be reluctant to use any of the petrol pumps, because the distance to them would be the same from the airport.
This is why game theorists consider this situation a socioeconomically feasible option.Nevertheless, the world is dominated by greed and animal spirits.The lion and the tiger should be close in a jungle, logically speaking.Similarly, if we come back to our example, let us say that the BPCL becomes gierous and wants to make more money and decides to steal away the IOCs customers by simply going to the middle of the 1 km stretch, moving to 500 meters. BPCL does not stand for this.It will also move to the middle, resulting in clustering, as seen with McDonald's and Burger King.The Nash Equilibrium, or the sequence of events where both are located in the middle of the map, is described by game theorists as the result of this phenomenon.When we choose stocks to buy, this lesson on competition is helpful to investors. Because the item being sold was a commodity, it was not a commodity.Both places have the same fuel quality.The aim of this battle was to provide customers with a sense of distance and convenience when traveling on the other side of the road in case of a petrol pump.Take movie theatres for example.If we compare two luxury theatre companies, PVR and Inox, both have the same level of comfort and price. Location is also a big factor in planning a theatre.For this reason, financially stronger multiplex franchises like Inox and PVR have a leg up on smaller theaters.Nevertheless, the story for McDonalds, Burger King, Dominos, and Pizza Hut is not the same.Personal tastes play a key role in this regard. There will be certain sectors in which competitive advantage, in the form of geographical advantage, dictates market share and company performance.In other situations, such as good brands, the geographical location is of little importance.When shopping for your next stock to buy, keep this in mind.Disclaimer: This essay is only intended to inform.It is not a stock pick and should not be confused with it.