The Max-Min Principle of Product Differentiation: An Experimental Analysis
Theoretical models of multidimensional product differentiation predict that in duopoly firms differentiate maximally along one dimension and minimally along the other dimensions. We experimentally reproduce a market in which firms can differentiate their products along two horizontal dimensions. The main result is that subjects do not differentiate their products and locate near the center consumers' distribution.
|Date of creation:||09 Dec 2002|
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