This paper investigates whether the principle of minimum differentiation extends to the location choices of multi-product firms of different sizes supplying differentiated goods to consumers with heterogeneous tastes. Our analysis explicitly allows for the possibility that the resulting location equilibria will be asymmetric, and we compare the multiproduct equilibria with the location configurations that would arise if each outlet were operated by a single-product firm. We show that multi-product firms disperse their products if consumer heterogeneity is low or distance between markets is high. They adopt more dispersed locations than single product firms to limit business stealing from their own outlets. Asymmetry is shown to characterize location configurations of both multi-product and single-product firms.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Find related papers by JEL classification: D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets R30 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - General
This paper has been announced in the following NEP Reports:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Brander, James A & Eaton, Jonathan, 1984.
"Product Line Rivalry,"
American Economic Review,
American Economic Association, vol. 74(3), pages 323-34, June.
[Downloadable!] (restricted)
Other versions:
Anderson, Simon P & Neven, Damien J, 1991.
"Cournot Competition Yields Spatial Agglomeration,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(4), pages 793-808, November.
[Downloadable!] (restricted)
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)