Price equilibrium in address models of product differentiation: unit-elastic demand |
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| Authors: | Martin Peitz |
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| Institution: | (1) Faculty of Economics and Business Administration, Goethe-University Frankfurt, Uni-PF 77, 60054 Frankfurt, GERMANY (e-mail: peitz@wiwi.uni-frankfurt.de) , DE |
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| Abstract: | Summary. I present a class of address models of product differentiation with unit-elastic individual demand and show the existence
of Nash equilibrium in prices under assumptions on utility functions and the taste and income heterogeneity across consumers.
This paper complements the work by Caplin and Nalebuff (1991, Econometrica), who analyze unit demand models of product differentiation.
Received: December 28, 1998; revised version: September 5, 2001 |
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| Keywords: | and Phrases: Imperfect competition Characteristics approach Price competition Income heterogeneity Variable individual demand |
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