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Competition, Product Proliferation and Welfare: A Study of the U.S. Smartphone Market

Ying Fan () and Chenyu Yang

No 11423, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper studies (1) whether, from a welfare point of view, oligopolistic competition leads to too few or too many products in a market, and (2) how a change in competition affects the number and the composition of product offerings. We address these two questions in the context of the U.S. smartphone market. Our findings show the market contains too few products and that a reduction in competition decreases both product number and product variety. These results suggest that merger policies should be stricter when we take into account the effects of a merger on product choice in addition to those on pricing.

Keywords: endogenous product choice; merger; product proliferation; smartphone industry (search for similar items in EconPapers)
JEL-codes: L13 L15 L41 L63 (search for similar items in EconPapers)
Date: 2016-08
New Economics Papers: this item is included in nep-com and nep-mkt
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Related works:
Journal Article: Competition, Product Proliferation, and Welfare: A Study of the US Smartphone Market (2020) Downloads
Working Paper: Competition, Product Proliferation and Welfare: A Study of the U.S.\ Smartphone Market (2016) Downloads
Working Paper: Competition, Product Proliferation and Welfare: A Study of the U.S. Smartphone Market (2014) Downloads
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