Customization: Ideal Varieties, Product Uniqueness and Price Competition

Oksana Loginova () and X. Wang ()

Economics Bulletin, 2009, vol. 29, issue 4, 2573-2581

Abstract: We study customization in the Hotelling model with two firms. In addition to providing ideal varieties, the perceived uniqueness of a customized product contributes independently to consumer utility. We show that only when consumer preferences for uniqueness are high customization occurs in equilibrium.

Keywords: customization; product differentiation; product uniqueness; price competition (search for similar items in EconPapers)
JEL-codes: D4 L1 (search for similar items in EconPapers)
Date: 2009-10-14
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