The Economic Theory of Product Differentiation

Cover......Page 1
Frontmatter......Page 2
Contents......Page 8
Preface......Page 10
1.1 The aims of the book......Page 12
1.2 Methodology and overview......Page 13
1.3 The formalisation of product differentiation......Page 15
1.4 The incentive to differentiate......Page 17
1.5 Some basic propositions......Page 19
1.6 Product differentiation and welfare......Page 20
2.1 Introduction......Page 22
2.2 Price competition in a model of spatial duopoly......Page 24
2.3 Transportation costs and the existence problem......Page 28
2.4 The choice of location (or product selection) in spatial models......Page 33
2.5 Long-run equilibrium with costless relocation......Page 45
3.1 Introduction......Page 53
3.2 The oligopoly equilibrium......Page 58
3.3 Monopolistic competition......Page 63
4.1 Introduction and some preliminary results......Page 67
4.2 A digression into the case of homogeneous products......Page 70
4.3 Product diversity: first- and second-best optima and the market equilibrium......Page 71
4.4 Biases in product selection......Page 78
5.1 Introduction......Page 84
5.2 Quality choice: welfare optimum and market equilibria......Page 86
5.3 Durability: quality and quantity as pure substitutes......Page 94
5.4 Durability: stock and flow equilibrium......Page 97
5.5 Quality choice under oligopoly: symmetric equilibrium......Page 105
5.6 Product reliability......Page 116
6.1 Introduction......Page 120
6.2 The finiteness property and natural oligopolies......Page 125
6.3 The finiteness property again......Page 134
6.4 Quality selection......Page 137
6.5 Conclusion: product differentiation and market structure......Page 143
7.1 Introduction......Page 146
7.2 Horizontal product differentiation: limiting market equilibria......Page 149
7.3 Vertical product differentiation and industrial structure......Page 166
8.2 The existence of pure profit in free-entry equilibrium......Page 171
8.3 Brand proliferation and entry deterrence......Page 176
8.4 Exit costs......Page 180
8.5 Product specification as an alternative entry-deterrence strategy......Page 181
8.6 Market preemption in expanding markets......Page 182
9.1 Introduction......Page 184
9.2 The gains from trade under horizontal product differentiation......Page 185
9.3 The gains from trade in vertically differentiated products......Page 188
9.4 Conclusion......Page 193
Notes......Page 195
Bibliography......Page 205
Indexes......Page 211