IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Microfoundations for the Linear Demand Product Differentiation Model, with Applications

  • Stephen Martin

This paper shows (1) that the Spence-Dixit-Vives model of linear demand for differentiated varieties is implied if supplies of substitutes reduce individual consumers' reservation prices as indicated in the paper, (2) that for the micro-foundation-based version SDV demand and endogenous sunk costs, the equilibrium number of varieties is independent of the number of consumers in the market and the marginal cost of a variety of unit quality, and (3) that with endogenous sunk cost, if demand does not expand with the number of varieties (as in the SDV model), the equilibrium number of varieties is unchanged, but equilibrium qualities and quantities purchased are less, all else equal.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.krannert.purdue.edu/programs/phd/Working-paper-series/Year-2009/1221.pdf
Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify (Krannert PHD)


Download Restriction: no

Paper provided by Purdue University, Department of Economics in its series Purdue University Economics Working Papers with number 1221.

as
in new window

Length: 27 pages
Date of creation: Mar 2009
Date of revision:
Handle: RePEc:pur:prukra:1221
Contact details of provider: Postal: Krannert Building, West Lafayette, IN 47907
Web page: http://www.krannert.purdue.edu/programs/phd

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:pur:prukra:1221. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Krannert PHD)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.