Firm Size and Diversification: Asymmetric Multiproduct Firms under Cournot Competition

Arbeitspapier

A positive relationship between firm size and product diversification is a long-standing stylized fact. However, so far there is no appropriate theoretical model to explain the underlying forces of this observation. This paper analyzes an oligopoly model with asymmetric multiproduct frms, which is capable of addressing this issue. The model suggests that intangible assets of firms, which affect marginal costs or perceived quality of goods within a firm's product line, play a key role for the empirical regularity that larger firms are more diversified.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 1047

Classification and Topics

• Classification: Wirtschaft
• Subject: asymmetric equilibrium ; diversification ; firm size ; intangible assets ; multiproduct firms

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Grossmann, Volker
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/76521
• Last update: 10.03.2025, 11:45 AM CET