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| Author: | Anderson, S.P. Palma, A. de |
| Title: | Market performance with multiproduct firms |
| Journal: | Journal of Industrial Economics
2006 : MAR, VOL. 54:1, p. 95-124 |
| Index terms: | markets market entry competition demand prices models |
| Language: | eng |
| Abstract: | This paper revisits the fundamental issue of market (here as: mkt.) provision of variety associated with Chamberlin, Spence, and Dixit-Stiglitz when firms (as: fs.) sell multiple products (as: pds). Both pds. and fs. are (horizontally) differentiated. Proposed is a general nested demand framework where consumers first decide on a firm then which variant to buy and how much. This is used to determine the mkt.'s biases when fs. compete in product ranges and prices. The mkt. system attracts too many fs. with too few pds. per firm: fs. restrain product ranges to relax price competition, which exacerbates over-entry. |
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