Monopolistic Competition, Multiproduct Firms and Optimum Product Diversity

Gianmarco Ottaviano and Jacques Thisse

No 2151, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper tackles the issue of optimum product diversity in an imperfectly competitive market with small or large firms. First, it develops a quadratic utility model of monopolistic competition with horizontal product differentiation which avoids some of the main pitfalls of the S-D-S approach. Second, it extends the model to the case of multiproduct firms showing how product diversity is affected with respect to monopolistic competition. In particular, it is shown that monopolistic competition with single-product firms is the limiting case of oligopolistic competition with multiproduct firms when either varieties gets more and more differentiated or when the entry cost goes further and further down.

Keywords: Monopolistic Competition; Multiproduct Firms; Product Variety (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Date: 1999-05
References: Add references at CitEc
Citations: View citations in EconPapers (47)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2151 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Monopolistic competition, multiproduct firms and optimum product diversity (1999)
Working Paper: Monopolistic Competition, Multiproduct Firms and Optimum Product Diversity (1999)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:2151

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=2151

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().