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Vertical differentiation with non-uniform consumers¡ distribution

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Author Info

  • Jean-Marc Bonnisseau

    ()
    (CERMSEM)

  • Rim Lahmandi-Ayed

    ()
    (ISG de Tunis and LEGI)

Abstract

The note explores a vertical differentiation model with continuous non-uniform consumers' distribution. First some results concerning the finiteness property obtained with uniform consumers' distribution are generalized. Second we prove an existence result of price equilibrium when the distribution is concave. Finally we exhibit a counter-example to the existence of price equilibrium to show the importance of the concavity assumption on the distribution.

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File URL: ftp://mse.univ-paris1.fr/pub/mse/cahiers2004/B04114.pdf
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Bibliographic Info

Paper provided by Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number b04114.

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Length: 14 pages
Date of creation: Dec 2004
Date of revision:
Handle: RePEc:mse:wpsorb:b04114

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Keywords: Vertical differentiation; non-uniform distribution; price equilibrium existence;

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References

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  1. Acharyya, Rajat, 1998. "Monopoly and product quality: Separating or pooling menu?," Economics Letters, Elsevier, vol. 61(2), pages 187-194, November.
  2. Shaked, Avner & Sutton, John, 1983. "Natural Oligopolies," Econometrica, Econometric Society, vol. 51(5), pages 1469-83, September.
  3. Rim Lahmandi-Ayed, 2004. "Finiteness property in vertically differentiated markets: a note on locally increasing and decreasing returns," Economic Theory, Springer, vol. 23(2), pages 371-382, January.
  4. Lahmandi-Ayed, R, 1996. "Natural Oligopolies : A Vertical Differentiation Model," Papiers d'Economie Mathématique et Applications 96.05, Université Panthéon-Sorbonne (Paris 1).
  5. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
  6. Kim, Joo-Han & Kim, Jae-Cheol, 1996. "Quality choice of multiproduct monopolist and spill-over effect," Economics Letters, Elsevier, vol. 52(3), pages 345-352, September.
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Cited by:
  1. ENCAOUA, David & HOLLANDER, Abraham J., 2005. "First-Degree Discrimination by a Duopoly: Pricing and Quality Choice," Cahiers de recherche 2005-01, Universite de Montreal, Departement de sciences economiques.

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