Hub location with single assignment in presence of competition: a follower’s perspective

In this paper we address the hub location problem with single assignment in a competitive environment. It is assumed that an existing transportation company (called leader) already operates in a market using a single allocation hub network and a new company (called follower) wants to enter the same market and capture as much market share as possible. The customers choose the service provides based on the offered service level (measured as the cost, time, distance, etc.). The follower’s problem is modeled as a mixed integer programming problem and solved using a standard optimization package. Computational experiments based on the famous CAB data set show that the market share value captured by the follower heavily depends on the number of the opened hub facilities by the players and also on some other input parameters.