Perfect Substitutes: A Note On The Alchian-Allen Hypothesis
Alchian and Allen hypothesized that a country will export high rather than low quality goods. Here we show that if the inherent attributes of the commodities are identical the country will only export the high-quality good.
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- Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
- Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
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