2018

Price Competition in Product Variety Networks

Särtryck nr 2018:41

Författare: Philip Ushchev och Yves ZenouÅr: 2018 Publikation: Games and Economic Behavior Årgång (nr): 110 (Juli) Sidor: 226–247
Artikeln online (behörighet kan krävas)


We develop a product-differentiated model where the product space is a network defined as a set of varieties (nodes) linked by their degrees of substitutability (edges). We also locate consumers into this network, so that the location of each consumer (node) corresponds to her “ideal” variety. We show that there exists a unique Bertrand–Nash equilibrium where prices are determined by both the firms' sign-alternating Bonacich centralities and the average willingness to pay across consumers. We also investigate how local product differentiation and the spatial discount factor affect the equilibrium prices. We show that these effects non-trivially depend on the network structure. In particular, we find that, in a star-shaped network, the central firm does not always enjoy higher monopoly power than the peripheral firms.


Referens:
Ushchev, Philip och Yves Zenou (2018), "Price Competition in Product Variety Networks". Games and Economic Behavior 110(Juli), 226–247.

Daniel Waldenström

Ämnesområde: arv och gåvor, finansiell utveckling, inkomst och förmögenhetsfördelning samt skatter.

En av de frågor Daniel Waldenström försöker besvara i sin forskning:

  • Hur stor är den ekonomiska ojämlikheten i Sverige och vilka faktorer bestämmer den?

IFN kalendarium

Institutet för Näringslivsforskning, Grevgatan 34 - 2 tr, Box 55665, SE-102 15 Stockholm, Sweden | Tel: +46-(0)8-665 45 00 | info@ifn.se