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

Ying Fan () and Chenyu Yang ()
Additional contact information
Chenyu Yang: Department of Economics, University of Michigan, 611 Tappan Street, Ann Arbor, MI 48109

No 14-14, Working Papers from NET Institute

Abstract: We consider a structural model of demand and supply where firms endogenously offer vertically differentiated products and exercise second-degree price discrimination. We apply this model to the smartphone industry and quantify the welfare effects of price discrimination and competition. We use counterfactual simulations to assess how the welfare changes when each firm only offers its highest-quality product. We also study the market outcomes such as price, product variety and welfare if later entrants in the market entered earlier.

Keywords: endogenous product choice; second-degree price discrimination; smartphone industry (search for similar items in EconPapers)
JEL-codes: L11 L13 L15 L63 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2014-09
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind and nep-mkt
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Related works:
Journal Article: Competition, Product Proliferation, and Welfare: A Study of the US Smartphone Market (2020)
Working Paper: Competition, Product Proliferation and Welfare: A Study of the U.S. Smartphone Market (2016)
Working Paper: Competition, Product Proliferation and Welfare: A Study of the U.S.\ Smartphone Market (2016)
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