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On the Definition of Differentiated Products in the Real World

Author

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  • Beth Allen

    (University of Minnesota)

Abstract

This paper proposes an abstract model of commodity differentiation that incorporates manufacturing imprecision and dimensioning and tolerancing standards. The potential consistency of such model based on engineering consideration is analyzed. For a large pure exchange economy, competitive equilibria exist and are Pareto optimal. Production issues such as the derived demand for intermediate products, continuity of cost functions, and product selection and technology issues such as mass customization, agile manufacturing, and manufacturability are discussed.

Suggested Citation

  • Beth Allen, 1999. "On the Definition of Differentiated Products in the Real World," Discussion Papers 03-16, University of Copenhagen. Department of Economics, revised Apr 2003.
    • Handle: RePEc:kud:kuiedp:0316
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    File URL: http://www.econ.ku.dk/english/research/publications/wp/2003/0316.pdf/
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