Nesting horizontal and vertical differentiation

We explore a variant of the Hotelling model which allows to nest horizontal and vertical differentiation into a unified setup whose key parameter is the relative natural market size of the firms. In this setup, equilibrium prices increase whenever population's disparity decreases. We also explore the properties of the model in the case of entry by a vertically differentiated product into an otherwise horizontally differentiated industry.

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Year of publication:	2012
Authors:	Gabszewicz, Jean J. ; Wauthy, Xavier Y.
Published in:	Regional Science and Urban Economics. - Elsevier, ISSN 0166-0462. - Vol. 42.2012, 6, p. 998-1002
Publisher:	Elsevier
Subject:	Horizontal differentiation \| Vertical differentiation \| Hotelling

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Type of publication:	Article
Classification:	L13 - Oligopoly and Other Imperfect Markets
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010594976