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Horizontal Differentiation with Differential Input Costs: Retail Prices for Milk by Fat Content

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  • Sexton, Richard J.
  • Xia, Tian
  • Carman, Hoy F.

Abstract

Markets for horizontally differentiated products with differential costs are important and have unique features. This paper studies sellers' pricing strategy and market equilibrium in these markets under various competition scenarios in the context of retail milk markets. An empirical study is also conducted to examine the effects of cost factors on retail milk prices and to characterize competition in markets in four California cities.
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Suggested Citation

  • Sexton, Richard J. & Xia, Tian & Carman, Hoy F., "undated". "Horizontal Differentiation with Differential Input Costs: Retail Prices for Milk by Fat Content," 2004 Annual meeting, August 1-4, Denver, CO 271498, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:271498
    DOI: 10.22004/ag.econ.271498
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    References listed on IDEAS

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    1. Eric Maskin & John Riley, 1984. "Monopoly with Incomplete Information," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 171-196, Summer.
    2. Jaskold Gabszewicz, J. & Thisse, J. -F., 1980. "Entry (and exit) in a differentiated industry," Journal of Economic Theory, Elsevier, vol. 22(2), pages 327-338, April.
    3. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(1), pages 3-13.
    4. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    5. repec:cor:louvrp:-400 is not listed on IDEAS
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