A Generalized Model of Horizontal Product Differentiation
AbstractA famous result in the literature on horizontal product differentiation is due to C. d'Aspremont, J. J. Gabszewicz, and J. F. Thisse (1979). They show that, in a slightly modified Hotelling model, profit-maximizing firms choose maximum instead of minimum differentiation. The aim of this paper is to show that the result of maximum differentiation is not robust. The author provides provide an example for a wide class of markets where firms will choose interior solutions if consumers have an outside option for their use of money. Copyright 1994 by Blackwell Publishing Ltd.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Journal of Industrial Economics.
Volume (Year): 42 (1994)
Issue (Month): 3 (September)
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- Vermeulen, Ben & La Poutré, Han & de Kok, Ton, 2012. "Dynamics and equilibria under incremental horizontal differentiation on the Salop circle," MPRA Paper 51449, University Library of Munich, Germany.
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- Martin Peitz, 1998. "- A Difficulty With The Address Models Of Product Differentiation," Working Papers. Serie AD 1998-21, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Yongmin Chen & Michael H. Riordan, 2008. "Price-increasing competition," RAND Journal of Economics, RAND Corporation, vol. 39(4), pages 1042-1058.
- Lisa George & Joel Waldfogel, 2000. "Who Benefits Whom in Daily Newspaper Markets?," NBER Working Papers 7944, National Bureau of Economic Research, Inc.
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