On the consistent use of linear demand systems if not all varieties are available

Felix Höffler ()
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Felix Höffler: WHU - Otto Beisheim School of Management

Economics Bulletin, 2008, vol. 4, issue 14, 1-5

Abstract: Linear demand formulations for price competition in horizontally differentiated products are sometimes used to compare situations where additional varieties become available, e.g. due to market entry of new firms. We derive a consistent demand system to analyze such situations and highlight potential problems that can arise from an inconsistent approach.

JEL-codes: D1 L1 (search for similar items in EconPapers)
Date: 2008-06-07
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