Product Line Design

Simon Anderson and Levent Celik

No 10324, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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

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: 2014-12
New Economics Papers: this item is included in nep-com, nep-ind and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Journal Article: Product line design (2015)
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