Why are all the gas stations, cafes and restaurants in one crowded spot? As two competitive cousins vie for ice-cream-selling domination on one small beach, discover how game theory and the Nash Equilibrium inform these retail hotspots.
Lesson by Jac de Haan, animation by Luke Rowsell.
Let's also not forget zoning laws. In many cases, it's illegal to set up your business anywhere except next to similar businesses, because that's the only place arbitrary zoning restrictions allow such businesses.
Ah. Good point.
This isn't to say that this phenomenon is the only reason stores end up next to each other. It's just an interesting idea/type of behavior.