We study customization in the Hotelling model with two firms. In addition to providing ideal varieties, the perceived uniqueness of a customized product contributes independently to consumer utility. We show that only when consumer preferences for uniqueness are high customization occurs in...

This paper compares consumers’ optimal search behaviors and firms’ strategic reactions in prices under two modes of search: parallel search vs. sequential search, with incorporation of partial search depth which measures the amount of information to evaluate for a product. Our analysis shows...

Anderson and Renault (1999) show that when search cost is needed to evaluate any product, a U-shaped relationship exists between equilibrium price and product differentiation. This paper revisits this relationship by incorporating partial-depth search in a sequential search process which allows...