Monopolistic competition between differentiated products with demand for more than one variety

Monopolistic competition between differentiat ...
Andrei Hagiu, Andrei Hagiu
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Last edited by MARC Bot
November 30, 2023 | History

Monopolistic competition between differentiated products with demand for more than one variety

We analyze the existence of pure strategy symmetric price equilibria in a generalized version of Salop (1979)'s circular model of competition between differentiated products - namely, we allow consumers to purchase more than one brand. When consumers purchase all varieties from which they derive non-negative net utility, there is no competition, so that each firm behaves like an unconstrained monopolist. When each consumers is interested in purchasing an exogenously given number (n) of varieties, we show that there is no pure strategy symmetric price equilibrium in general (for n > 2 with linear transportation costs). In turn, if the limitation on the number of varieties consumers purchase comes from a budget constraint then we obtain a multiplicity of symmetric price equilibria, which can be indexed by the number of varieties consumers purchase in equilibrium.

Publish Date
Language
English
Pages
48

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Book Details


Edition Notes

"April 2009"--Publisher's website.

Includes bibliographical references.

Published in
Boston]
Series
Working paper / Harvard Business School -- 09-095, Working paper (Harvard Business School) -- 09-095

The Physical Object

Pagination
48 p.
Number of pages
48

ID Numbers

Open Library
OL50204351M
OCLC/WorldCat
542094938, 542094940

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