A firm that offers an additional product can capture business from rival firms for other products when consumers prefer to concentrate their purchases at a single supplier. This may lead firms to offer excessive product variety from the social standpoint. A firm may even completely foreclose competing firms from the market by introducing a new product. Forbidding new product introductions (e.g., forbidding universal banking or forbidding a new airline route), forbidding mergers that broaden firms' product lines (as, e.g., the EC forbade a merger of commuter aircraft manufacturers), and forbidding Sunday shopping may sometimes be appropriate public policies.
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Volume (Year): 28 (1997) Issue (Month): 3 (Autumn) Pages: 472-488 Download reference. The following formats are available: HTML
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S. Baranzoni & P. Bianchi & L. Lambertini, 2000.
"Market Structure,"
Working Papers
368, Dipartimento Scienze Economiche, Universita' di Bologna.
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