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The Max-Min Principle of Product Differentiation: An Experimental Analysis

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  • Andrea Mangani
  • Paolo Patelli

Abstract

Theoretical models of multidimensional product differentiation predict that in duopoly firms differentiate maximally along one dimension and minimally along the other dimensions. We experimentally reproduce a market in which firms can differentiate their products along two horizontal dimensions. The main result is that subjects do not differentiate their products and locate near the center consumers' distribution.

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Paper provided by Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy in its series LEM Papers Series with number 2002/05.

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Date of creation: 09 Dec 2002
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Handle: RePEc:ssa:lemwps:2002/05

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