Please use this identifier to cite or link to this item: https://hdl.handle.net/11147/12896
Title: Product design in monopolistic competition
Authors: Dindaroğlu, Burak
Keywords: Additively separable preferences
Monopolistic competition
Product design
Specialization
Substitution
Differentiation
Equilibrium
Issue Date: 2022
Publisher: Wiley
Abstract: We consider a model of monopolistic competition where producers can manipulate an elasticity parameter at an early stage. We interpret this as a choice of product specialization. Lower marginal costs of production lead to more generic products in all equilibria, which lead to fewer varieties under free-entry. Entry of a new firm increases overall specialization and increases prices, that is, the environment exhibits price-increasing competition. The loss of consumer surplus due to higher prices and lower consumption is compensated by the value of additional variety, hence entry also increases consumer surplus. Therefore, price-increasing competition need not be anticompetitive under endogenous specialization.
Description: Article; Early Access
URI: https://doi.org/10.1111/ijet.12363
https://hdl.handle.net/11147/12896
ISSN: 1742-7355
1742-7363
Appears in Collections:Rectorate / Rektörlük
Scopus İndeksli Yayınlar Koleksiyonu / Scopus Indexed Publications Collection
WoS İndeksli Yayınlar Koleksiyonu / WoS Indexed Publications Collection

Files in This Item:
File SizeFormat 
Int J of Economic Theory.pdf
  Until 2025-01-01
1.39 MBAdobe PDFView/Open    Request a copy
Show full item record



CORE Recommender

Page view(s)

86
checked on Feb 26, 2024

Google ScholarTM

Check




Altmetric


Items in GCRIS Repository are protected by copyright, with all rights reserved, unless otherwise indicated.