The Importance of the Distribution of Consumers in Horizontal Product Differentiation

This Paper examines the importance of the distribution of consumers in Hotelling's circle on the comparison between the optimal and the market equilibrium levels of diversity. It finds that when most consumers are located very close to the firms, the result of Salop that the equilibrium number of firms is larger than the optimal one (surplus maximizing) can be reversed.

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Year of publication:	2001-10
Authors:	Calvó-Armengol, Antoni ; Zenou, Yves
Institutions:	C.E.P.R. Discussion Papers
Subject:	hotelling \| market equilibrium \| social optimism

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Extent:	application/pdf
Series:	CEPR Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 3031
Classification:	D43 - Oligopoly and Other Forms of Market Imperfection ; L12 - Monopoly; Monopolization Strategies ; R32 - Other Spatial Production and Pricing Analysis
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005067611