The importance of the distribution of consumers in horizontal product differentiation

Antoni Calvó-Armengol, Yves Zenou

Research output: Contribution to journalArticleResearchpeer-review

7 Citations (Scopus)

Abstract

This paper examines the importance of the distribution of consumers in Hotelling's circle on the comparison between the optimal and the market equilibrium levels of diversity. It finds that when most consumers are located very close to the firms, the result of Salop-that the equilibrium number of firms is larger than the optimal one (surplus maximizing)-can be reversed.

Original languageEnglish
Pages (from-to)793-803
Number of pages11
JournalJournal of Regional Science
Volume42
Issue number4
DOIs
Publication statusPublished - Dec 2002
Externally publishedYes

Cite this