Location models as models of product choice (Q1065695): Difference between revisions
From MaRDI portal
Changed an Item |
Set profile property. |
||
Property / MaRDI profile type | |||
Property / MaRDI profile type: MaRDI publication profile / rank | |||
Normal rank |
Revision as of 03:07, 5 March 2024
scientific article
Language | Label | Description | Also known as |
---|---|---|---|
English | Location models as models of product choice |
scientific article |
Statements
Location models as models of product choice (English)
0 references
1985
0 references
Markets in which firm choice of product is an economic decision are commonly analyzed using a variant of the location model pioneered by Hotelling. This paper develops a framework for formalizing the idea that a set of consumers with preferences defined over an abstract set of commodities can be represented as if they behaved as is typically assumed in the goods-as-locations models. With this framework in place, we are able to derive the preference and technology assumptions underlying the two most common versions of these models, the line segment and circular models. This framework also makes it possible to determine the foundations of the now well-known Principle of Minimum Differentiation.
0 references
choice of product
0 references
goods-as-locations models
0 references
line segment
0 references
circular models
0 references
Principle of Minimum Differentiation
0 references