Price equilibrium in address models of product differentiation: unit-elastic demand

Martin Peitz

Economic Theory, 2002, vol. 20, issue 4, 849-860

Abstract: I present a class of address models of product differentiation with unit-elastic individual demand and show the existence of Nash equilibrium in prices under assumptions on utility functions and the taste and income heterogeneity across consumers. This paper complements the work by Caplin and Nalebuff (1991, Econometrica), who analyze unit demand models of product differentiation.

Keywords: Imperfect competition; Characteristics approach; Price competition; Income heterogeneity; Variable individual demand. (search for similar items in EconPapers)
JEL-codes: D43 (search for similar items in EconPapers)
Date: 2002-03-21
Note: Received: December 28, 1998; revised version: September 5, 2001
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Citations: View citations in EconPapers (9)

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