IDEAS home Printed from https://ideas.repec.org/p/whu/wpaper/08-01.html
   My bibliography  Save this paper

On the consistent use of linear demand systems if not all varieties are available

Author

Listed:
  • Felix Höffler

Abstract

Linear demand formulations for price competition in horizontally differentiated products are sometimes used to compare situations where additional varieties become available, e.g. due to market entry of new firms. We derive a consistent demand system to analyze such situations and highlight potential problems that can arise from an inconsistent approach.

Suggested Citation

  • Felix Höffler, 2008. "On the consistent use of linear demand systems if not all varieties are available," WHU Working Paper Series - Economics Group 08-01, WHU - Otto Beisheim School of Management.
    • Handle: RePEc:whu:wpaper:08-01
    as

    Download full text from publisher

    File URL: https://nbn-resolving.org/urn:nbn:de:hbz:992-opus4-5102
    File Function: First version, 2008
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Inderst, Roman & Wey, Christian, 2004. "The incentives for takeover in oligopoly," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1067-1089, November.
    2. Dan Kovenock & Suddhasatwa Roy, 2005. "Free Riding in Noncooperative Entry Deterrence with Differentiated Products," Southern Economic Journal, John Wiley & Sons, vol. 72(1), pages 119-137, July.
    3. Xavier Vives, 2001. "Oligopoly Pricing: Old Ideas and New Tools," MIT Press Books, The MIT Press, edition 1, volume 1, number 026272040x, December.
    4. Steven Fries & Damien Neven & Paul Seabright & Anita Taci, 2006. "Market entry, privatization and bank performance in transition1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(4), pages 579-610, October.
    5. Ordover, Janusz & Shaffer, Greg, 2007. "Wholesale access in multi-firm markets: When is it profitable to supply a competitor?," International Journal of Industrial Organization, Elsevier, vol. 25(5), pages 1026-1045, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marc Bourreau & Johan Hombert & Jerome Pouyet & Nicolas Schutz, 2011. "Upstream Competition between Vertically Integrated Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 59(4), pages 677-713, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Felix Höffler, 2008. "On the consistent use of linear demand systems if not all varieties are available," Economics Bulletin, AccessEcon, vol. 4(14), pages 1-5.
    2. repec:ebl:ecbull:v:4:y:2008:i:14:p:1-5 is not listed on IDEAS
    3. Marc Bourreau & Johan Hombert & Jerome Pouyet & Nicolas Schutz, 2011. "Upstream Competition between Vertically Integrated Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 59(4), pages 677-713, December.
    4. Rodney Beard, 2015. "N-Firm Oligopoly With General Iso-Elastic Demand," Bulletin of Economic Research, Wiley Blackwell, vol. 67(4), pages 336-345, October.
    5. Ciwei Dong & Liu Yang & Chi To Ng, 2020. "Quantity Leadership for a Dual-Channel Supply Chain with Retail Service," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 37(02), pages 1-32, March.
    6. Kaplow, Louis & Shapiro, Carl, 2007. "Antitrust," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 2, chapter 15, pages 1073-1225, Elsevier.
    7. McCarthy, Ian M., 2016. "Advertising intensity and welfare in an equilibrium search model," Economics Letters, Elsevier, vol. 141(C), pages 20-26.
    8. Rodrigo J. Harrison & Roberto Munoz, 2003. "Stability and Equilibrium Selection in a Link Formation Game," Game Theory and Information 0306004, University Library of Munich, Germany.
    9. Leandro Arozamena & Estelle Cantillon, 2004. "Investment Incentives in Procurement Auctions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(1), pages 1-18.
    10. Joseph E. Harrington, Jr., 2004. "Cartel Pricing Dynamics in the Presence of an Antitrust Authority," RAND Journal of Economics, The RAND Corporation, vol. 35(4), pages 651-673, Winter.
    11. Lapo Filistrucchi & Tobias J. Klein, 2013. "Price Competition in Two-Sided Markets with Heterogeneous Consumers and Network Effects," Working Papers 13-20, NET Institute.
    12. MITRAILLE Sébastien & MOREAUX Michel, 2007. "Inventories and Endogenous Stackelberg Hierarchy in Two-period Cournot Oligopoly," LERNA Working Papers 07.02.223, LERNA, University of Toulouse.
    13. Alexandre de Corniere, 2013. "Search Advertising," Economics Series Working Papers 649, University of Oxford, Department of Economics.
    14. Nocke, Volker & White, Lucy, 2010. "Vertical merger, collusion, and disruptive buyers," International Journal of Industrial Organization, Elsevier, vol. 28(4), pages 350-354, July.
    15. Sen, Debapriya & Stamatopoulos, Giorgos, 2016. "Licensing under general demand and cost functions," European Journal of Operational Research, Elsevier, vol. 253(3), pages 673-680.
    16. Derek Clark & Øystein Foros & Jan Sand, 2011. "Foreclosure in contests," Public Choice, Springer, vol. 148(1), pages 215-232, July.
    17. Alex Dickson & Roger Hartley, 2006. "On a foundation for Cournot equilibrium," Economics Discussion Paper Series 0638, Economics, The University of Manchester.
    18. Sudipta Sarangi & Pascal Billand & Christophe Bravard & S. Chakrabarti, 2009. "Spying in Multi-market Oligopolies," Departmental Working Papers 2009-11, Department of Economics, Louisiana State University.
    19. Jingsong Cui, 2005. "The Demand for International Message Telephone Services: A Two-Stage Budgeting Model," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 27(2), pages 167-183, September.
    20. Léautier, Thomas-Olivier & Rochet, Jean-Charles, 2014. "On the strategic value of risk management," International Journal of Industrial Organization, Elsevier, vol. 37(C), pages 153-169.
    21. Ludovic Julien & Olivier Musy & Aurélien Saïdi, 2011. "Do Followers Really Matter in Stackelberg Competition?," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 75, pages 11-27.

    More about this item

    Keywords

    Horizontal product differentiation; preferences for variety; market entry;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:whu:wpaper:08-01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Rainer Michael Rilke (email available below). General contact details of provider: https://edirc.repec.org/data/whukode.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.