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Differentiated Bertrand markets: restoring the minimum differentiation principle

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  • Stefano Colombo

Abstract

I introduce non-perfect substitutability between products into the spatial Bertrand model. I show that if goods are complements, the firms always agglomerate. If goods are substitutes, the firms agglomerate if the transportation costs are not too high. Copyright Springer-Verlag Berlin Heidelberg 2013

Suggested Citation

  • Stefano Colombo, 2013. "Differentiated Bertrand markets: restoring the minimum differentiation principle," Letters in Spatial and Resource Sciences, Springer, vol. 6(2), pages 103-108, July.
    • Handle: RePEc:spr:lsprsc:v:6:y:2013:i:2:p:103-108
    DOI: 10.1007/s12076-012-0090-3
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    References listed on IDEAS

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    1. Stefano Colombo, 2011. "Taxation and predatory prices in a spatial model," Papers in Regional Science, Wiley Blackwell, vol. 90(3), pages 603-612, August.
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    6. Rhee, Byong-Duk, et al, 1992. "Restoring the Principle of Minimum Differentiation in Product Positioning," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 1(3), pages 475-505, Fall.
    7. Albaek, Svend & Lambertini, Luca, 1998. "Collusion in differentiated duopolies revisited," Economics Letters, Elsevier, vol. 59(3), pages 305-308, June.
    8. Shimizu, Daisuke, 2002. "Product differentiation in spatial Cournot markets," Economics Letters, Elsevier, vol. 76(3), pages 317-322, August.
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    More about this item

    Keywords

    Product differentiation; Spatial competition; Agglomeration; D43; L13; L40;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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