Product differentiation and competitive selection
AbstractBy studying the effect of different patterns of demand in an evolutionary selection model this paper shows how product differentiation reduces competitive selection pressure and thus increases the chances for the coexistence of firms. With the example of a duopoly it shows that: (1) a monopoly is the likely outcome of competition in homogeneous products, (2) although product differentiation does not preclude a monopoly it greatly improves the chances for the stable coexistence of firms in the long run, and (3) the more differentiated the products, the more stable the duopoly. Copyright Springer-Verlag Berlin/Heidelberg 2005
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Bibliographic InfoArticle provided by Springer in its journal Journal of Evolutionary Economics.
Volume (Year): 15 (2005)
Issue (Month): 5 (November)
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Web page: http://link.springer.de/link/service/journals/00191/index.htm
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- repec:cup:macdyn:v:4:y:2000:i:3:p:373-414 is not listed on IDEAS
- Eaton, B Curtis & Lipsey, Richard G, 1979. "The Theory of Market Pre-emption: The Persistence of Excess Capacity and Monopoly in Growing Spatial Markets," Economica, London School of Economics and Political Science, vol. 46(182), pages 149-58, May.
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