Measuring diversity in product space: the missing axiom

Authors
Bernhofen, DM
Citation
Dm. Bernhofen, Measuring diversity in product space: the missing axiom, ECON LETT, 70(1), 2001, pp. 69-72
Citations number
2
Categorie Soggetti
Economics
Journal title
ECONOMICS LETTERS
ISSN journal
01651765 → ACNP
Volume
70
Issue
1
Year of publication
2001
Pages
69 - 72
Database
ISI
SICI code
0165-1765(200101)70:1<69:MDIPST>2.0.ZU;2-F
Abstract
In contrast to the standard monopolistic competition models of product diff erentiation, an n-good quadratic utility specification allows for asymmetri es in the degree of substitutability among products. However, in order to g uarantee the existence of a market equilibrium, these asymmetries need to b e constrained to fulfil the 'transitivity of closeness' axiom. (C) 2001 Els evier Science BN. All rights reserved. JEL classification: D11; L11.