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Equilibrium with Product Differentiation
Open accessAbstract
A model of product differentiation which combines elements of both spatial and representative consumer formulations is used to examine the properties of single- and multiple-price equilibria. Conditions under which decreases in the intensity of consumer preferences reduce price are given. It is shown that, with certain types of demand curves, entry can eliminate price-cost markups even given product differentiation. If competition is localized, it is demonstrated that entry does not affect the markup. Finally, the effect of spurious product differentiation on price is examined.
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Citations
Cited by
Automobile Prices in Market Equilibrium
Berry, S., Levinsohn, J., & Pakes, A. (1995) · Econometrica · doi:10.2307/2171802 · Cited by 4,883
Reducing buyer search costs: Implications for electronic marketplaces
Bakos, J. Y. (1997) · Management Science · doi:10.1287/mnsc.43.12.1676 · Cited by 2,259
Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets
Gabaix, X., & Laibson, D. I. (2005) · SSRN Electronic Journal · doi:10.2139/ssrn.728545 · Cited by 441
Welfare Implications of User Innovation
Henkel, J., & von Hippel, E. (2005) · Essays in Honor of Edwin Mansfield · doi:10.1007/0-387-25022-0_5 · Cited by 174
Mojduszka (2001) · doi:10.1002/1520-6297(200124)17:1
Metadata
- Authors
- Perloff, J. M., & Salop, S. C.
- Venue
- The Review of Economic Studies
- Publisher
- Oxford University Press (OUP)
- Published
- 1985-01
- Volume
- 52
- Issue
- 1
- Pages
- 107
- ISSN
- 0034-6527 (ISSN-L)
- OpenAlex
- W1873165136
- Cited by
- 424
- References
- 0
- FWCI
- 12.40
- Type
- journal article
- Language
- en
- Open access
- green
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- Perloff, J. M., & Salop, S. C. (1985). Equilibrium with Product Differentiation. The Review of Economic Studies. https://doi.org/10.2307/2297473
Data sources
Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
