Survival at the center--The stability of minimum differentiation
Abstract We model a Hotelling market with multidimensional product differentiation in an evolutionary framework. Both evolutionary stability (in the sense of Schaffer, 1989) and stochastic stability (following [Kandori et al., 1993] and [Young, 1993]) are analyzed. It is shown that firms move towards the center in product space, i.e. a "principle of minimum differentiation" on all dimensions of the product space applies.
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