Monopolies Thrive Even With Endless Product Variety, Study Finds
The article proves that in markets where companies sell multiple similar products, there is a unique balance point where they compete called Bertrand-Nash equilibrium. This happens when consumers' preferences follow a specific pattern. If the pattern is not slim enough, companies can still have a lot of power even with many products. The study also shows that with a certain distribution, we can predict what consumers will choose and how companies will set prices and quality.