Product Diversity in Asymmetric Oligopoly: Is the Quality of Consumer Goods too Low?
We analyze an oligopoly model with horizontal di¤erentiation and quality di¤erences. High quality goods are over-priced and under-produced. When the market is fairly covered, low quality products may be pro…table when their social contribution is negative, leading to too many products in equilibrium. In a relatively uncovered market, even low quality goods are under-produced and there may be too few entrants. However, when …xed costs di¤er across qualities, the market may produce low quality goods when it should produce high quality ones. The model is calibrated using market data for yoghurt.
|Date of creation:||Jun 2000|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.virginia.edu/economics/home.html |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Anderson, Simon P & de Palma, Andre & Nesterov, Yurii, 1995.
"Oligopolistic Competition and the Optimal Provision of Products,"
Econometric Society, vol. 63(6), pages 1281-1301, November.
- Anderson, S. P. & De Palma, A. & Nesterov, Y., . "Oligopolistic competition and the optimal provision of products," CORE Discussion Papers RP -1179, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- ANDERSON, Simon P. & DE PALMA, André & NESTEROV, Yurii, 1994. "Oligopolistic Competition and the Optimal Provision of Products," CORE Discussion Papers 1994034, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Deneckere, Raymond J & Rothschild, Michael, 1992.
"Monopolistic Competition and Preference Diversity,"
Review of Economic Studies,
Wiley Blackwell, vol. 59(2), pages 361-73, April.
- Spence, Michael, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," Review of Economic Studies, Wiley Blackwell, vol. 43(2), pages 217-35, June.
When requesting a correction, please mention this item's handle: RePEc:vir:virpap:349. 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: (Debby Stanford)
If references are entirely missing, you can add them using this form.