Economics, Econometrics and Finance
4 years ago

Increased product variety leads to more competition and lower prices.

Review of International Economics
Oligopolistic Competition, Technology Innovation, and Multiproduct Firms
Jiandong Ju

Paper Summary

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The article explores how companies in a competitive market decide to offer multiple products. They found that when customers can easily switch between a company's products, the company will offer fewer products. But when customers can easily switch between different companies' products, companies will offer more products. This affects how many companies are in the market.