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Fat Products


  • Alexei Alexandrov


"The economics literature generally considers products as points in some characteristics space. With more products being flexible or self-customizable to some degree, it makes sense to model products with positive measure. I develop a model of firms which can offer interval-long "fat" products in the spatial model of differentiation. Contrary to the standard results, profits of the firms can decrease with increased differentiation in the market-there is a standard effect of lowering the incentive to cut prices, but there is also an incentive to provide more content, resulting in higher costs and possibly overall losses." Copyright 2008 Blackwell Publishing.

Suggested Citation

  • Alexei Alexandrov, 2008. "Fat Products," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 17(1), pages 67-95, March.
  • Handle: RePEc:bla:jemstr:v:17:y:2008:i:1:p:67-95

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    • Alexei Alexandrov, 2006. "Fat Products," Discussion Papers 1435, Northwestern University, Center for Mathematical Studies in Economics and Management Science.

    References listed on IDEAS

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    10. Ellickson, Paul, 2005. "Does Sutton Apply to Supermarkets?," Working Papers 05-05, Duke University, Department of Economics.
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    12. Yannis Bakos & Erik Brynjolfsson, 1999. "Bundling Information Goods: Pricing, Profits, and Efficiency," Management Science, INFORMS, vol. 45(12), pages 1613-1630, December.
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    Cited by:

    1. Bar-Isaac, Heski, 2009. "Breadth, depth, and competition," Economics Letters, Elsevier, vol. 103(2), pages 110-112, May.
    2. Loginova, Oksana & Wang, X. Henry, 2013. "Mass customization in an endogenous-timing game with vertical differentiation," Economic Modelling, Elsevier, vol. 33(C), pages 164-173.
    3. repec:umc:wpaper:0814 is not listed on IDEAS
    4. Oksana Loginova & X. Henry Wang, 2011. "Customization with Vertically Differentiated Products," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(2), pages 475-515, June.
    5. Hsu, Wen-Tai & Lu, Yi & Ng, Travis, 2014. "Does competition lead to customization?," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 10-28.
    6. Stühmeier, Torben, 2016. "Media market concentration and pluralism," CAWM Discussion Papers 87, University of Münster, Center of Applied Economic Research Münster (CAWM).
    7. repec:kap:ejlwec:v:43:y:2017:i:2:d:10.1007_s10657-016-9548-x is not listed on IDEAS
    8. Bernhardt Dan & Graham Brett, 2015. "Multi-product Bertrand Oligopoly with Exogenous and Endogenous Consumer Heterogeneity," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 15(2), pages 167-209, July.
    9. Oksana Loginova & X. Henry Wang, 2009. "Customization: Ideal Varieties, Product Uniqueness and Price Competition," Economics Bulletin, AccessEcon, vol. 29(4), pages 2573-2581.
    10. Oksana Loginova & X. Hnery Wang, 2010. "Customization in an Endogenous-Timing Game with Vertical Differentiation," Working Papers 1008, Department of Economics, University of Missouri.
    11. Takagoshi, Noritsugu & Matsubayashi, Nobuo, 2013. "Customization competition between branded firms: Continuous extension of product line from core product," European Journal of Operational Research, Elsevier, vol. 225(2), pages 337-352.
    12. Kopsakangas-Savolainen Maria & Takalo Tuomas, 2014. "Competition Before Sunset: The Case of the Finnish ATM Market," Review of Network Economics, De Gruyter, vol. 13(1), pages 1-33, March.
    13. Garcia Pires, Armando J., 2014. "Media diversity, advertising, and adaptation of news to readers’ political preferences," Information Economics and Policy, Elsevier, vol. 28(C), pages 28-38.
    14. Alexandrov, Alexei & Deb, Joyee, 2012. "Price discrimination and investment incentives," International Journal of Industrial Organization, Elsevier, vol. 30(6), pages 615-623.

    More about this item

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets


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