We consider the price and welfare effects of competition in targeted product design, in the context of the Salop circle … reasonable conditions, price-increasing competition takes place, for intermediate levels of the number of firms. This effect is …

. The lower the costs of differentiating their products from each other the more relaxed competition is in the product … higher the costs the harsher the competition in the market and the closer to the Bertrand solution of the one-shot game with …