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. Copyright 2002 Blackwell Publishers

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Year of publication:	2002
Authors:	Calvó-Armengol, Antoni ; Zenou, Yves
Published in:	Journal of Regional Science. - Wiley Blackwell, ISSN 0022-4146. - Vol. 42.2002, 4, p. 793-803
Publisher:	Wiley Blackwell

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Extent:	text/html
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005294251