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Product line design

Anderson, S. P. & Celik, L. ORCID: 0000-0002-7668-6358 (2015). Product line design. Journal of Economic Theory, 157, pp. 517-526. doi: 10.1016/j.jet.2015.01.014


We characterize the product line choice and pricing of a monopolist from the upper envelope of net marginal revenue curves to the individual product demand functions. The equilibrium product line constitutes those varieties yielding the highest upper envelope. In a generalized vertical differentiation framework, the equilibrium line is exactly the same as the first-best socially optimal line. These upper envelope and first-best optimal line findings extend to symmetric Cournot oligopoly.

Publication Type: Article
Additional Information: © 2015 . This manuscript version is made available under the CC-BY-NC-ND 4.0 license
Publisher Keywords: Product line design Product differentiation Second-degree price discrimination, Product line pricing, Cournot multi-product competition
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HF Commerce
Departments: School of Policy & Global Affairs > Economics
Text - Accepted Version
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