Dynamic Product Diversity
This paper examines the frequency of new product introductions in monopoly markets where demand is subject to temporary satiation. Consumers' taste for diversity is satisfied over time as new varieties are introduced to the market. If two varieties are introduced in consecutive periods then they become imperfect substitutes and the firm has an incentive to raise prices and sell each one to consumers with higher average valuations (better preference matching). Higher frequency can also generate market expansion. However, under strong temporary satiation, better preference matching may dominate and the frequency of new product introductions may become socially excessive.
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- Jerome Adda & Russell Cooper, 1997.
"Balladurette and Juppette: A Discrete Analysis of Scrapping Subsidies,"
NBER Working Papers
6048, National Bureau of Economic Research, Inc.
- Jerome Adda & Russell Cooper, 2000. "Balladurette and Juppette: A Discrete Analysis of Scrapping Subsidies," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 778-806, August.
- Adda, Jérôme & Cooper, Russell W., 1997. "Balladurette and jupette: a discrete analysis of scrapping subsidies," CEPREMAP Working Papers (Couverture Orange) 9711, CEPREMAP.
- Jerome Adda & Russell Cooper, 1997. "Balladurette and Juppette: A Discrete Analysis of Scrapping Subsidies," Papers 0076, Boston University - Industry Studies Programme.
- Arthur Fishman & Rafael Rob, 2000. "Product Innovation by a Durable-Good Monpoly," RAND Journal of Economics, The RAND Corporation, vol. 31(2), pages 237-252, Summer.
- Waldman, Michael, 1993. "A New Perspective on Planned Obsolescence," The Quarterly Journal of Economics, MIT Press, vol. 108(1), pages 273-83, February.
- Yongmin Chen & Michael H. Riordan, 2007. "Price and Variety in the Spokes Model," Economic Journal, Royal Economic Society, vol. 117(522), pages 897-921, 07.
- Kenneth S. Corts, 2001. "The Strategic Effects of Vertical Market Structure: Common Agency and Divisionalization in the US Motion Picture Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(4), pages 509-528, December.
- de Meza, David & Ungern-Sternberg, Thomas von, 1982. "Monopoly, product diversity and welfare," Regional Science and Urban Economics, Elsevier, vol. 12(3), pages 313-324, August.
- Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
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