Competition in multi-characteristics spaces: Hotelling was almost right

• 成果类型: Article
• 署名作者: Irmen, A; Thisse, JF
• 署名单位: University of Lausanne; Universite Catholique Louvain; Institut Polytechnique de Paris; Ecole des Ponts ParisTech
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1006/jeth.1997.2348
• 发表日期: 1998
• 页码: 76-102
• 关键词: product positioning; multi-characteristics space

摘要

Lancasterian models of product differentiation typically assume a one-dimensional characteristics space. We show that standard results on prices and locations no longer hold when firms compete in a multi-characteristics space. In the location game with n characteristics, firms choose to maximize differentiation in the dominant characteristic and to minimize differentiation in the others when Ihc salience coefficient of the former is sufficiently large, Thus, the principle of minimum differentiation holds for all but one characteristic. Furthermore, prices do not necessarily fall when products get closer in the characteristics space because price competition is relaxed when products are differentiated enough in the dominant characteristic. (C) 1998 Academic Press.