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We analyse an oligopoly model incorporating horizontal differentiation and quality differences. High quality goods are overpriced and underproduced. When the market is fairly well covered, low quality products may be profitable when their net social contribution is negative, implying excessive...
Persistent link: https://www.econbiz.de/10005655417
The authors provide a comparison of three spatial price policies: uniform pricing, mill pricing, and spatial price discrimination. Profits, consumer surplus, and social surplus are compared in a duopoly model. Until recently, oligopoly analysis has been stalled because of nonexistence of...
Persistent link: https://www.econbiz.de/10005139934
When production takes place before firms allocate output to different markets, the equilibrium may be different from the one corresponding to simultaneous production and allocation decisions. The difference arises when firms account for the output-shifting effect their own production levels have...
Persistent link: https://www.econbiz.de/10005139939
This paper proves the existence of a symmetric equilibrium with multiproduct firms using a nested logit model of demand. The demand model is parameterized by two variables that characterize different dimensions of preference for variety. These reflect intragroup heterogeneity and intergroup...
Persistent link: https://www.econbiz.de/10005294512