Journal of Economic Theory and Econometrics: Journal of the Korean Econometric Society
Home

About this journal
   Aims and scope

   Editorial board

Submit your article

Archive

Search

Journal of Economic Theory and Econometrics
JETEM/계량경제학보/計量經濟學報/JKES
Journal of the Korean Econometric Society

Overprovision of Product Diversity: Monopoly versus Duopoly

Vol.15, No.4, December , 1–19


English Version |  Korean Version
  •   (Ewha Womans University)

PDF
Abstract  

Using a simple model of horizontal differentiation, this paper examines the problem of overprovision of product diversity that causes loss of social welfare. We ask if there is a difference arising from market structures, specifically: will duopolistic market yield different outcomes from multiproduct monopoly under the circumstances when the latter would overprovide diversity? Our analysis reveals that there is no difference. Both monopoly and duopoly causes the same amount of welfare loss by offering too much diversity. However, duopoly competition increases consumers' surplus. We will briefly discuss policy implications of our results and also interpretation of the model in terms of electronic commerce and internet-based industries.


Keywords
   Horizontal Differentiation, Multiproduct Monopoly, Entry, Internet Industry

JEL classification codes
  
Links

KCI list
Korean ES
JETEM at SCOPUS

Powered by MathJax