Nesting horizontal and vertical differentiation
(2012) Regional Science and Urban Economics — Vol. 42, n° 6, p. 998-1002 (2012)
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- Abstract
- We explore a variant of the Hotelling model which allows to nest horizontal and vertical differentiation into a unified setup whose key parameter is the relative natural market size of the firms. In this setup, equilibrium prices increase whenever population's disparity decreases. We also explore the properties of the model in the case of entry by a vertically differentiated product into an otherwise horizontally differentiated industry.
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Citations
Jaskold Gabszewicz, J., & Wauthy, X. (2012). Nesting horizontal and vertical differentiation. Regional Science and Urban Economics, 42(6), 998-1002. https://doi.org/10.1016/j.regsciurbeco.2011.10.004 (Original work published 2012)