Multiproduct Firms and Market Structure
AbstractModels of (horizontal) product differentiation generally admit many equilibria. These include concentrated equilibria, in which few firms each offer many products, and fragmented equilibria, in which many firms each offer one product. Since these outcomes depend in a delicate way on features of the models that are hard to identify or proxy empirically, these models may seem empirically empty in regard to predictions about industrial structure. This article proposes a simple and natural reparameterization of such models in terms of empirically observable market characteristics, thereby generating testable predictions about the relationship between market size and market structure (concentration).
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Bibliographic InfoArticle provided by The RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 21 (1990)
Issue (Month): 1 (Spring)
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- Sault, Joanne & Toivanen, Otto & Waterson, Michael, 2003. "Market Structure And Entry In Fast Food," The Warwick Economics Research Paper Series (TWERPS) 661, University of Warwick, Department of Economics.
- Clarissa Yeap, 2006. "The Production Decisions of Large Competitors: Detecting Cost Advantages and Strategic Behavior in Restaurants," Working Papers 06-19, Center for Economic Studies, U.S. Census Bureau.
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