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Questions tagged [product-differentiation]

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Measuring Degree of Product Differentiation/Market Segmentation

In context of Hotelling location model, if firms are located at end points (maximal differentiation), then, except the customer(s) at the centre, all others have a strictly preferred seller. Suppose ...
Dayne's user avatar
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Consumer Welfare vertical differentiation [SOLVED]

Suppose consumers have the standard Tirole's utility $U_A = \theta q + \alpha X_A - P$ if they buy product A and $U_0 = 0$ if they don't buy this product (where $X_A$ is the actual demand of product A)...
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Term for perishable goods that are non-divisible with a set redemption date (concert tickets vs. Milk)

What is the terminology to distinguish goods like milk and concert tickets. Both are perishable. If we were to say milk expired on the last day of the month, and a concert will occur on the last day ...
EconNew4369's user avatar
2 votes
1 answer
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Total derivative evaluates to zero: problem while doing comparative statics

I am playing with a toy model version for my research and I have an implicit equation defining the equilibrium: $$\phi = \frac {S}{NF(\phi(u-\eta)+\eta - c)}$$ where $S,N,u,\eta,c$ are parameters and $...
gradstudent's user avatar
2 votes
1 answer
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Demand derivation in vertical differentiation with a bad characteristic

Today's question is about a variant of Tirole vertical differentiation framework. I am stuck thinking about the demand and profit function derivation where consumers can pick the level of $x$ at their ...
KArrow'sBest's user avatar
4 votes
2 answers
114 views

Why so many suppliers of inexpensive ordinary products

There are a very large number of suppliers of common, inexpensive products, and I am wondering why a few large companies don't simply provide all the supply? I am not thinking of food or clothing or ...
Scott Rowe's user avatar
3 votes
1 answer
109 views

Multidimensional product differentiation and density functions

I’m having trouble with a model (link) I’m working on for a review. The author uses a two firms hotelling model with a multidimensional product space (x,y)with orthogonal characteristics, which are ...
KArrow'sBest's user avatar
1 vote
1 answer
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Prices set by firms are the same in a Salop circle. But why?

Trying to calculate the prices charged by each firm, I don't understand why the solution argues that all firms set the same price. If I use the assumption that they are the same, I can figure out the ...
Jente's user avatar
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Hep with total differentiation of an AD function [closed]

Is there anyone who can help me with a total differentiation exercize. I am starting with the following formula for AD: $$x=\mu ^{-1}(g+i+e)$$ Where $\mu$ is the Keynesian multiplier. And have to ...
Alessandro's user avatar
4 votes
0 answers
56 views

Examples of Analysis of Competition in a Latent Product Characteristic Space

Competition between firms offering heterogenous products is often an exercise of constructing the right kind of spatial model. There is the famous Hotelling model and many other papers that model ...
Pburg's user avatar
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Excessive entry without fixed costs

Mankiw & Whinston (1986) show that the market may contain too many firms. The intuition is that if a firm charges a suboptimal high price, a rival has a demand curve that is "too high" and can ...
Fusscreme's user avatar
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4 votes
2 answers
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Multiproduct firms and horizontal product differentiation

I am having difficulty modelling the effect of horizontal product differentiation between multiproduct firms. I've been looking at models specifically by Hotelling and d'Aspremont. Hotelling concluded ...
Ryan's user avatar
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4 votes
2 answers
115 views

Is there an index that describes how differentiated a product is?

Some products are commodities, identical regardless of the producer. Others are very different an people look for specific brands of whatever they buy. Has anybody built any sort of index of how ...
Fix.B.'s user avatar
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2 votes
2 answers
158 views

What would make a restaurant offer all-day breakfast?

Some restaurants particularly fast food ones offer breakfast food only during, well, breakfast hours. Other restaurants however offer breakfast food throughout their opening hours. Some restaurants ...
BCLC's user avatar
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What are some ways to add quality to the supply-demand model?

Please excuse me, I hardly know anything about economics yet. When the quality of a product changes, the demand curve moves. But what if there are different versions of a product, of varying ...
Hyperbolic Asker's user avatar