What is the reason for the grouping of similar businesses in close proximity in various locations?
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Imagine everyone goes to the closest option. This is a simplification of how it actually is, but it works for the analogy.
Imagine a mile long beach. If I want to sell ice cream on the beach, I would want to open it in the middle so I can be as close as possible to everyone on the beach. If someone else then opens an ice cream stand on the beach, if we wanted to serve everyone equally, then I would be a quarter mile down the beach, and they could be 3/4 mile down the beach and we split the population 50/50 while being as close as possible to everyone on our half. However what if the other person wants more customers. If they move down to my location, then they get 3/4 of the beach being closest to them, while I only get 1/4. If I want to steal customers back, I would need to be on the other side of them, but then they could steal back, rinse and repeat until we are both in the center of the beach, splitting it 50/50.
Imagine everyone goes to the closest option. This is a simplification of how it actually is, but it works for the analogy.
Imagine a mile long beach. If I want to sell ice cream on the beach, I would want to open it in the middle so I can be as close as possible to everyone on the beach. If someone else then opens an ice cream stand on the beach, if we wanted to serve everyone equally, then I would be a quarter mile down the beach, and they could be 3/4 mile down the beach and we split the population 50/50 while being as close as possible to everyone on our half. However what if the other person wants more customers. If they move down to my location, then they get 3/4 of the beach being closest to them, while I only get 1/4. If I want to steal customers back, I would need to be on the other side of them, but then they could steal back, rinse and repeat until we are both in the center of the beach, splitting it 50/50.
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