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Locating inside the Salop circle: demand rotations in a micro-founded model

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  • Bar-Isaac, Heski
  • Caruana, Guillermo
  • Cuñat, Vicente

Abstract

We present a micro-founded model of design that leads to simple demand rotations. We present simple sufficient conditions that determine when design should be extreme (fully standardized or fully tailored) or rather take intermediate positions.

Suggested Citation

  • Bar-Isaac, Heski & Caruana, Guillermo & Cuñat, Vicente, 2011. "Locating inside the Salop circle: demand rotations in a micro-founded model," LSE Research Online Documents on Economics 43163, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:43163
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    More about this item

    JEL classification:

    • F3 - International Economics - - International Finance
    • G3 - Financial Economics - - Corporate Finance and Governance

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