Market Equilibrium and Optimal Product Diversity: A Logit Specification

This paper has two objectives. First, we present the logit model of discrete consumer choice and apply it to an oligopoly model of product differentiation. Second, we reconsider the question of monopolistic competition and optimal product diversity. The model suggests that when the market outcome involves a large number of products, the market solution does not deviate far from the social optimum.

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Year of publication:	1985
Authors:	Anderson, Simon ; Palma, Andre de
Institutions:	Economics Department, Queen's University

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Series:	Working Papers.
Type of publication:	Book / Working Paper
Notes:	59 pages
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005653275