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Vertical differentiation with non-uniform consumers' distribution

Author

Listed:
  • Jean-Marc Bonnisseau

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Axe Economie mathématique et jeux - CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Rim Lahmandi-Ayed

    (LEGI - Laboratoire d'Économie et de Gestion Industrielle [Tunis] - Ecole Polytechnique de Tunisie - UCAR - Université de Carthage (Tunisie) = University of Carthage)

Abstract

This note explores a vertical differentiation model with a continuous non-uniform consumers' distribution. First, a result concerning the finiteness property obtained with uniform consumers' distribution is generalized. Second, we prove an existence result of price equilibrium when the distribution is concave. Finally, we exhibit a counter-example to the existence of price equilibrium to show that the concavity assumption is not superfluous.

Suggested Citation

  • Jean-Marc Bonnisseau & Rim Lahmandi-Ayed, 2007. "Vertical differentiation with non-uniform consumers' distribution," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00265701, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00265701
    DOI: 10.1111/j.1742-7363.2007.00054.x
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    Cited by:

    1. Germán Coloma, 2023. "Demand estimation and market definition in quality-differentiated products: The case of beer in Argentina," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 69, pages 48-64.
    2. Encaoua David & Hollander Abraham, 2007. "First-Degree Discrimination by a Duopoly: Pricing and Quality Choice," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 7(1), pages 1-21, May.
    3. C. Benassi & A. Chirco & C. Colombo, 2015. "Beyond the Uniform Distribution: Equilibrium Prices and Qualities in a Vertically Differentiated Duopoly," Working Papers wp1044, Dipartimento Scienze Economiche, Universita' di Bologna.
    4. Janko Hernández Cortés & Paolo Morganti, 2022. "Existence and uniqueness of price equilibria in location-based models of differentiation with full coverage," Journal of Economics, Springer, vol. 136(2), pages 115-148, July.
    5. Corrado Benassi & Alessandra Chirco & Caterina Colombo, 2019. "Vertical differentiation beyond the uniform distribution," Journal of Economics, Springer, vol. 126(3), pages 221-248, April.

    More about this item

    Keywords

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    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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