The Importance of the Distribution of Consumers in Horizontal Product Differentiation

Yves Zenou and Calvó-Armengol, Antoni
Authors registered in the RePEc Author Service: Antoni Calvó-Armengol

No 3031, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This Paper examines the importance of the distribution of consumers in Hotelling's circle on the comparison between the optimal and the market equilibrium levels of diversity. It finds that when most consumers are located very close to the firms, the result of Salop that the equilibrium number of firms is larger than the optimal one (surplus maximizing) can be reversed.

Keywords: Hotelling; Market equilibrium; Social optimism (search for similar items in EconPapers)
JEL-codes: D43 L12 R32 (search for similar items in EconPapers)
Date: 2001-10
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Citations: View citations in EconPapers (2)

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Journal Article: The Importance of the Distribution of Consumers in Horizontal Product Differentiation (2002)
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