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Oligopolistic Competition, Technology Innovation, and Multiproduct Firms

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  • Jiandong Ju

    ()
    (University of Oklahoma, Norman , USA)

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    Abstract

    Firms' proliferation behavior in a differentiated product market is studied using an oligopolistic competition model with multiproduct firms. The model has the following characteristics: (1) the elasticity of substitution across firm's own products and the elasticity of substitution across different firms are allowed to differ; (2) the product managers of the same firm behave cooperatively rather than independently; (3) the number of firms is determined by a free-entry condition and so is endogenous. If the elasticity of substitution across the firm's own products increases, it is shown that the firm proliferates less and the number of firms in the market increases. If the elasticity of substitution across different firms increases, firms proliferate more and the number of firms in the market decreases. Copyright 2003 Blackwell Publishing Ltd..

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Review of International Economics.

    Volume (Year): 11 (2003)
    Issue (Month): 2 (05)
    Pages: 346-359

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    Handle: RePEc:bla:reviec:v:11:y:2003:i:2:p:346-359

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    Cited by:
    1. Eckel, Carsten & Neary, J Peter, 2006. "Multi-Product Firms and Flexible Manufacturing in the Global Economy," CEPR Discussion Papers 5941, C.E.P.R. Discussion Papers.
    2. Ramon Caminal & Lluís M. Granero, 2012. "Multi‐product Firms and Product Variety," Economica, London School of Economics and Political Science, vol. 79(314), pages 303-328, 04.
    3. Grebel, Thomas, 2013. "On the tradeoff between similarity and diversity in the creation of novelty in basic science," Structural Change and Economic Dynamics, Elsevier, vol. 27(C), pages 66-78.

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