Market Equilibrium and Optimal Product Diversity: A Logit Specification
AbstractThis paper has two objectives. First, we present the logit model of discrete consumer choice and apply it to an oligopoly model of product differentiation. Second, we reconsider the question of monopolistic competition and optimal product diversity. The model suggests that when the market outcome involves a large number of products, the market solution does not deviate far from the social optimum.
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Bibliographic InfoPaper provided by Queen's University, Department of Economics in its series Working Papers with number 630.
Length: 59 pages
Date of creation: 1985
Date of revision:
Other versions of this item:
- ANDERSON, S. & de PALMA, A., 1986. "Market equilibrium and optimal product diversity: a logit specification," CORE Discussion Papers 1986008, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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- Simon P. Anderson & Andre de Palma, 1989. "The Logit as a Model of Product Differentiation: Further Results and Extensions," Discussion Papers 913, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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