Costly horizontal differentiation

• Tipo: Artigo em Revista Científica Internacional
• Data: 2011

Autores

João Correia-da-Silva (Autor) FEP; Joana Pinho (Autor) FEP

Revista

Título: Portuguese Economic Journal

Vol. 10 Nº 3

Páginas: 165-188

ISSN: 1617-982X

Editora: Springer Nature

Indexação

ISI Web of Knowledge - 5 Citações

ISI Web of Science

Scopus - 5 Citações

Econlit

Classificação Científica

FOS: Ciências sociais > Economia e gestão

CORDIS: Ciências Sociais > Economia

Outras Informações

ID Authenticus: P-002-JCP

DOI: 10.1007/s10258-010-0066-4

Abstract (EN): We study the effect of quadratic differentiation costs in the Hotelling model of endogenous product differentiation. The equilibrium location choices are found to depend on the magnitude of the differentiation costs (relatively to the transportation costs supported by consumers). When the differentiation costs are low, there is maximum differentiation. When they are high, there is partial differentiation, with a degree of differentiation that decreases with the differentiation costs. In any case, the socially optimal degree of differentiation is always lower than the equilibrium level. We also study the case of collusion between firms. If firms can combine locations but not prices, they locate asymmetrically when differentiation costs are high and choose maximum differentiation when they are low. When collusion extends to price setting, there is partial differentiation.

Idioma: Inglês

Tipo (Avaliação Docente): Científica

Nº de páginas: 24