Product differentiation and competitive selection

Serguei Kaniovski

Journal of Evolutionary Economics, 2005, vol. 15, issue 5, 567-580

Abstract: By studying the effect of different patterns of demand in an evolutionary selection model this paper shows how product differentiation reduces competitive selection pressure and thus increases the chances for the coexistence of firms. With the example of a duopoly it shows that: (1) a monopoly is the likely outcome of competition in homogeneous products, (2) although product differentiation does not preclude a monopoly it greatly improves the chances for the stable coexistence of firms in the long run, and (3) the more differentiated the products, the more stable the duopoly. Copyright Springer-Verlag Berlin/Heidelberg 2005

Keywords: Product differentiation; Selection; Market niche (search for similar items in EconPapers)
Date: 2005
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DOI: 10.1007/s00191-005-0268-6

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