Consumer heterogeneity and inefficiency in oligopoly markets

Guofu Tan and Junjie Zhou

Journal of Economic Theory, 2024, vol. 220, issue C

Abstract: Motivated by several recent studies on oligopolistic markets with consumer heterogeneity, we characterize the geometric properties of a class of inequalities involving the product of two integrals of the probability density quantile function and its reciprocal. Through three applications, we illustrate how our characterization can help enrich our understanding of the existing findings and shed some new insights, regarding the extent to which consumer welfare and social efficiency depend on the properties of the distributions of consumer valuation heterogeneity.

Keywords: Probability density quantile; Discrete choice model; Consumer heterogeneity; Log-concavity; Free entry; Efficiency; Competitive bundling; Multi-sided markets (search for similar items in EconPapers)
JEL-codes: L13 L4 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:220:y:2024:i:c:s0022053124000887

DOI: 10.1016/j.jet.2024.105882

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