Products with negative externalities are often subject to regulations that limit competition. The single-product case may suggest that it is irrelevant for aggregate welfare whether output is restricted via corrective taxes or limiting competition. However, when products are differentiated...

This paper reviews the Hotelling literature of product differentiation. The purpose of this work is to examine the impact of the market structure on price competitionand equilibrium differentiation. The existence of a general ’principle of differentiation’ is rejected. In contrast,...

We consider the spatial competition between two traditional physical (or offline) retailers and an Internet (or online) retailer where the efficiency of the latter differs from that of the former. We assume consumers are heterogeneous across two dimensions: (i) the costs of traveling to either...

In this paper, we present a model of endogenous vertical integration and horizontal differentiation. Thereexists two output brands and two versions of the input. The only mean for output differentiation is the inputversion used in output production. Firms may choose to vertically integrate to...

We show that the entry of a second firm in a horizontally differentiated market (ala Hotelling) may harm consumers as prices increase and consumer's surplus possibly decrease. We first derive the price and the consumer's surplus of a monopoly which is located at the center of the market. When a...

We consider the spatial competition between two traditional physical (or offline) retailers and an Internet (or online) retailer where the efficiency of the latter differs from that of the former. We assume consumers are heterogeneous across two dimensions: (i) the costs of traveling to either...

We study mass customization in a duopoly game in which the firms' products have different qualities. Whether customization choices are made simultaneously or sequentially is endogenously determined. Specifically, the customization stage of the game involves two periods. Each firm either selects...

We develop a duopoly price competition model that establishes a link between the recent literature of two-sided markets and behavior economics. We fully characterize the subgame perfect Nash equilibrium, which depends on the level of …xed costs. Moreover, introducing discrimination between the...

We study competition between two shopping centers (department stores or shopping malls) located at the extremes of a linear city. In contrast with the existing literature, we do not restrict consumers to make all their purchases at a single place. We obtain this condition as an equilibrium...

This paper analyses price competition between two firms producing horizontally and vertically differentiated goods. These are assumed to be credence goods, as consumers can hardly ascertain the quality of the commodities. We provide sufficient conditions for the existence of a unique price...