Arbeitspapier
Product Variety, Price Elasticity of Demand and Fixed Cost in Spatial Models
This paper explores the implications of price-dependent demand in spatial models of product differentiation. We introduce consumers with a quasi-linear utility function in the framework of the Salop (1979) model. We show that the so-called excess entry theorem relies critically on the assumption of completely inelastic demand. Our model is able to produce excessive, insufficient, or optimal product variety. A proof for the existence and uniqueness of symmetric equilibrium when price elasticity of demand is increasing in price is also provided.
- ISBN
-
978-3-86788-103-6
- Sprache
-
Englisch
- Erschienen in
-
Series: Ruhr Economic Papers ; No. 92
- Klassifikation
-
Wirtschaft
Production, Pricing, and Market Structure; Size Distribution of Firms
Oligopoly and Other Imperfect Markets
- Thema
-
Demand elasticity
spatial models
excess entry theorem
Produktdifferenzierung
Monopolistischer Wettbewerb
Preiselastizität
Fixkosten
Hotelling Modell
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Gu, Yiquan
Wenzel, Tobias
- Ereignis
-
Veröffentlichung
- (wer)
-
Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)
- (wo)
-
Essen
- (wann)
-
2009
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Gu, Yiquan
- Wenzel, Tobias
- Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)
Entstanden
- 2009
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