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The Max-Min-Min Principle of product Differentiation

Author

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  • Ansari, A.
  • Economides, N.
  • Steckel, J.

Abstract

We analyze two and three-dimensional variants of Hostelling's model of differentiated products. In our setup, consumers can place different importance on each product attribute; this is measured by a weight in the disutility of distance in each dimension.

Suggested Citation

  • Ansari, A. & Economides, N. & Steckel, J., 1996. "The Max-Min-Min Principle of product Differentiation," Working Papers 96-10, New York University, Leonard N. Stern School of Business, Department of Economics.
    • Handle: RePEc:ste:nystbu:96-10
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    References listed on IDEAS

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    2. Bonein, Aurélie & Turolla, Stéphane, 2009. "Sequential location under one-sided demand uncertainty," Research in Economics, Elsevier, vol. 63(3), pages 145-159, September.
    3. Jean-Luc Demeulemeester & Olivier Debande, 2008. "Quality and Variety Competition in Higher Education," Working Papers 08-10, Association Française de Cliométrie (AFC).
    4. Peter Mayerhofer & Peter Huber & Dieter Pennerstorfer, 2017. "Handel und Einzelhandel im Wiener Beschäftigungssystem. Arbeitsmarktrelevanz, Arbeitsplatzcharakteristika, absehbare Herausforderungen," WIFO Studies, WIFO, number 61951, April.
    5. Amit Khandelwal, 2010. "The Long and Short (of) Quality Ladders," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 77(4), pages 1450-1476.
    6. Tomasz Kopczewski & Maciej Pogorzelski, 2009. "Influence of the size of the company on developing of decision-making process of the enterprise concerning the spatial location," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 23.
    7. Barigozzi, Francesca & Ma, Ching-to Albert, 2018. "Product differentiation with multiple qualities," International Journal of Industrial Organization, Elsevier, vol. 61(C), pages 380-412.
    8. Irmen, Andreas & Thisse, Jacques-Francois, 1998. "Competition in Multi-characteristics Spaces: Hotelling Was Almost Right," Journal of Economic Theory, Elsevier, vol. 78(1), pages 76-102, January.
    9. Hans Degryse & Andreas Irmen, 2001. "On the incentives to provide fuel-efficient automobiles," Journal of Economics, Springer, vol. 73(2), pages 149-165, June.
    10. Gilad Sorek, 2015. "Location and Product Choice in Option Demand Markets," Auburn Economics Working Paper Series auwp2015-07, Department of Economics, Auburn University.
    11. Andrea Mangani & Paolo Patelli, 2002. "The Max-Min Principle of Product Differentiation: An Experimental Analysis," LEM Papers Series 2002/05, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    12. Niladri B. Syam & Ranran Ruan & James D. Hess, 2005. "Customized Products: A Competitive Analysis," Marketing Science, INFORMS, vol. 24(4), pages 569-584, February.
    13. Manfred Stadler, 2019. "Location in a Disk City with Consumer Concentration Around the Center," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 71(1), pages 35-50, February.
    14. José A. Novo-Peteiro, 2020. "Two-dimensional vertical differentiation with attribute dependence," Journal of Economics, Springer, vol. 131(2), pages 149-180, October.
    15. Takatoshi Tabuchi, 2009. "Hotelling's Spatial Competition Reconsidered," CIRJE F-Series CIRJE-F-674, CIRJE, Faculty of Economics, University of Tokyo.
    16. Subhadip Chakrabarti & Hans Haller, 2011. "An Analysis Of Advertising Wars," Manchester School, University of Manchester, vol. 79(1), pages 100-124, January.
    17. Janssen, Maarten C.W. & Karamychev, Vladimir A. & van Reeven, Peran, 2005. "Multi-store competition: Market segmentation or interlacing?," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 700-714, November.
    18. Suren Basov & Svetlana Danilkina & David Prentice, 2020. "When Does Variety Increase with Quality?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 56(3), pages 463-487, May.
    19. Takagoshi, Noritsugu & Matsubayashi, Nobuo, 2013. "Customization competition between branded firms: Continuous extension of product line from core product," European Journal of Operational Research, Elsevier, vol. 225(2), pages 337-352.
    20. Stefano Colombo & Noriaki Matsushima, 2020. "Competition Between Offline and Online Retailers with Heterogeneous Customers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 57(3), pages 647-664, November.
    21. Graubner, Marten & Balmann, Alfons & Sexton, Richard J., 2011. "Spatial Pricing and the Location of Processors in Agricultural Markets," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114601, European Association of Agricultural Economists.
    22. Vishal Gaur & Dorothée Honhon, 2006. "Assortment Planning and Inventory Decisions Under a Locational Choice Model," Management Science, INFORMS, vol. 52(10), pages 1528-1543, October.
    23. Sorek, Gilad, 2016. "Competition and consumer choice in option demand markets," Economics Letters, Elsevier, vol. 146(C), pages 13-16.

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    More about this item

    Keywords

    PRODUCTION; CONSUMPTION; FIRMS;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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