Monopolistic Competition and General Purpose Products
Most models of monopolistic competition study the question of the "optimal degree of product differentiation" by looking at the number of firms that will locate in characteristics space. This is somewhat restrictive. The development of "general purpose" products means that the needs of quite heterogenous consumers can be satisfied with the same homogenous product. The private and social incentives to produce "general purpose" products are studied in this paper within the "circular-road-model" of monopolistic competition. The degree of general purposeness of a product is approximated by its per unit distance transport costs. It is shown that there are strong forces leading the market to supply products whose transport costs are excessively low.
If you experience problems downloading a file, check if you have the proper application to view it first. 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 55 (1988)
Issue (Month): 2 ()
|Contact details of provider:|| |