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Product line design

Simon Anderson () and Levent Celik ()

Journal of Economic Theory, 2015, vol. 157, issue C, 517-526

Abstract: We characterize the product line choice and pricing of a monopolist from the upper envelope of net marginal revenue curves to the individual product demand functions. The equilibrium product line constitutes those varieties yielding the highest upper envelope. In a generalized vertical differentiation framework, the equilibrium line is exactly the same as the first-best socially optimal line. These upper envelope and first-best optimal line findings extend to symmetric Cournot oligopoly.

Keywords: Product line design; Product differentiation; Second-degree price discrimination; Product line pricing; Cournot multi-product competition (search for similar items in EconPapers)
JEL-codes: L12 L13 L15 (search for similar items in EconPapers)
Date: 2015
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