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Product Line Competition and Shopping Costs: Why Firms May Choose to Compete Head-to-Head.

Abstract:

Consider firms each selling a range of products, when each consumer prefers to concentrate his purchases with a single supplier because of the 'shopping costs' of using additional suppliers. If the firms offer different product ranges, some consumers will nevertheless use multiple suppliers to increase product variety and, since these consumers' purchases will be sensitive to the difference in firms' prices, the market may be quite competitive. If however, firms offer identical product ranges...

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Volume:
446
Publication date:
1990-01-01
URN:
uuid:b8dcdd22-a4e9-4ea3-a662-01f5f45ba1f5
Local pid:
oai:economics.ouls.ox.ac.uk:11702
Language:
English

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