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Felix Höffler
 
''On the consistent use of linear demand systems if not all varieties are available''
( 2008, Vol. 4 No.14 )
 
 
Linear demand formulations for price competition in horizontally differentiated products are sometimes used to compare situations where additional varieties become available, e.g. due to market entry of new firms. We derive a consistent demand system to analyze such situations and highlight potential problems that can arise from an inconsistent approach.
 
 
Keywords:
JEL: D1 - Household Behavior: General
L1 - Market Structure, Firm Strategy, and Market Performance: General
 
Manuscript Received : Jun 06 2008 Manuscript Accepted : Jun 07 2008

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