Journal ArticleDOI
Relaxing price competition through product differentiation
Avner Shaked,John Sutton +1 more
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In this paper, the authors present a very particular model of a market equilibrium in which two potential entrants will choose to enter the industry, and both will make positive profits, and they will choose both the specification of their respective products, and their prices.Abstract:
Central to the problem of providing adequate foundations for the analysis of monopolistic competition, is the problem of describing market equilibria in which firms choose both the specification of their respective products, and their prices. The present paper is concerned with a-very particular-model of such a market equilibrium. In this equilibrium, exactly two potential entrants will choose to enter the industry; they will choose to produce differentiated products; and both will make positive profits.read more
Citations
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Journal ArticleDOI
Automobile prices in market equilibrium
TL;DR: In this article, the authors developed techniques for empirically analyzing demand and supply in differentiated products markets and then applied these techniques to analyze equilibrium in the U.S. automobile industry.
Journal ArticleDOI
Estimating Discrete-Choice Models of Product Differentiation
TL;DR: In this paper, the authors consider the problem of "supply-and-demand" analysis on a cross-section of oligopoly markets with differentiated products and propose estimation by "inverting" the market-share equation to find the implied mean levels of utility for each good.
Journal ArticleDOI
The Economics of Networks
TL;DR: In this article, the authors analyze the salient features of networks and point out the similarities between the economic structure of network and the structure of vertically related industries, focusing on positive consumption and production externalities, commonly called network externalities.
Posted Content
Trade, Quality Upgrading and Wage Inequality in the Mexican Manufacturing Sector: Theory and Evidence from an Exchange-Rate Shock
TL;DR: In this article, a new model of the link between expanding trade and rising wage inequality in developing countries, and investigates its causal implications in a newly constructed panel of Mexican manufacturing establishments.
Journal ArticleDOI
Trade, Quality Upgrading, and Wage Inequality in the Mexican Manufacturing Sector
TL;DR: In this article, the authors propose a new mechanism linking trade and wage inequality in developing countries, the quality-upgrading mechanism, and investigate its empirical implications in panel data on Mexican manufacturing plants.
References
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Book ChapterDOI
Stability in Competition
TL;DR: In this paper, it was shown that if the purveyor of an article gradually increases his price while his rivals keep theirs fixed, the diminution in volume of his sales will in general take place continuously rather than in the abrupt way which has tacitly been assumed.
Journal ArticleDOI
Monopolistic competition and optimum product diversity
Avinash Dixit,Joseph E. Stiglitz +1 more
TL;DR: In this article, Pettengill tests whether there is an excessive number of firms in a monopolistically competitive equilibrium by a device of considerable expository merit, and redistributes the resources thus released equally over the remaining firms in the sector, to see if welfare can be improved.
Journal ArticleDOI
Reexamination of the perfectness concept for equilibrium points in extensive games
TL;DR: The concept of perfect equilibrium point has been introduced in order to exclude the possibility that disequilibrium behavior is prescribed on unreached subgames [Selten 1965 and 1973]. Unfortunately this definition of perfectness does not remove all difficulties which may arise with respect to unreached parts of the game.
Journal ArticleDOI
On hotelling's "Stability in competition"
TL;DR: In this article, the authors show that the so-called principle of minimum differentiation, as based on Hotelling's 1929 celebrated paper (Hotelling [3]), is invalid and that no equilibrium price solution will exist when both sellers are not far enough from each other.
Journal ArticleDOI
Price competition, quality and income disparities
TL;DR: In this paper, the authors considered a non-cooperative market where consumers are assumed to make indivisible and mutually exclusive purchases and the dependence of the latter on income distribution and quality parameters is analyzed.