This week we look more at product differentiation, covering
- Price discrimination in the Hotelling (1929) set-up.
- The Salop (1979) circular-city model, and how product proliferation may be used for entry deterrence.
- The Shaked and Sutton (1982) quality choice model of vertical differentiation.
- Some empirics, and other issues.
Lecture 6: Product differentiation 2