2001RePEc: Research Papers in EconomicsOpen access

Multiproduct Firms and Product Differentiation: A Survey

Juan A. Máñez, Michael Waterson, Manez, Juan A., Waterson, Michael

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Abstract

We start the survey by reviewing the implications of horizontal and vertical product differentiation on market structure under the assumption of single-product firms. Then, we analyse the main results of the multi-product firm models, both when variants are assumed differentiated in vertical attributes only and when variants are assumed differentiated in two dimensions (vertical and horizontal). Finally, we review the empirical literature about discrete-choice models of product differentiation.

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We start the survey by reviewing the implications of horizontal and vertical product differentiation on market structure under the assumption of single-product firms. Then, we analyse the main results of the multi-product firm models, both when variants are assumed differentiated in vertical attributes only and when variants are assumed differentiated in two dimensions (vertical and horizontal). Finally, we review the empirical literature about discrete-choice models of product differentiation.

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Available abstract

We start the survey by reviewing the implications of horizontal and vertical product differentiation on market structure under the assumption of single-product firms. Then, we analyse the main results of the multi-product firm models, both when variants are assumed differentiated in vertical attributes only and when variants are assumed differentiated in two dimensions (vertical and horizontal). Finally, we review the empirical literature about discrete-choice models of product differentiation.

Key concepts: Product differentiation, Horizontal and vertical, Product (mathematics), Industrial organization, Business, Economics, Econometrics, Microeconomics

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