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Competition, Product Proliferation and Welfare: A Study of the U.S.\ Smartphone Market

Author

Listed:
  • Chenyu Yang

    (University of Michigan, Ann Arbor)

  • Ying Fan

    (University of Michigan)

Abstract

We develop and estimate a structural model of the U.S. smartphone market. Based on the estimates, we study (1) whether there are too few or too many products in the market from a welfare point of view; and (2) how competition affects product offerings in the market. We find that there are too few products and a reduction in competition further decreases the product offerings. These results suggest that merger policies should be stricter when we take into account the effect of merger on firms' product choices in addition to its effect on prices.

Suggested Citation

  • Chenyu Yang & Ying Fan, 2016. "Competition, Product Proliferation and Welfare: A Study of the U.S.\ Smartphone Market," 2016 Meeting Papers 758, Society for Economic Dynamics.
    • Handle: RePEc:red:sed016:758
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

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