Vertical differentiation beyond the uniform distribution
Alessandra Chirco () and
Caterina Colombo ()
Additional contact information
Caterina Colombo: Università degli Studi di Ferrara
Journal of Economics, 2019, vol. 126, issue 3, No 2, 248 pages
Abstract The assessment of the way distributive shocks, such as increased polarization or higher inequality, affect vertically differentiated markets has been severely hampered by the standard reference to uniform distributions. In this paper we offer the first proof of existence of a subgame perfect Nash equilibrium in a vertically differentiated duopoly with uncovered market, for a large set of symmetric and asymmetric distributions of consumers, including, among others, all logconcave distributions. The proof relies on the ‘income share elasticity’ representation of the consumers’ density function. Some illustrative examples are also provided to assess the impact of distributive shocks on market equilibrium.
Keywords: Vertical differentiation; Duopoly; Non-uniform distribution; Subgame perfect equilibrium; Income share elasticity (search for similar items in EconPapers)
JEL-codes: L13 L11 D43 C72 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s00712-018-0631-3 Abstract (text/html)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:126:y:2019:i:3:d:10.1007_s00712-018-0631-3
Access Statistics for this article
Journal of Economics is currently edited by Giacomo Corneo
More articles in Journal of Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().