@techreport{Gu2009Product,
abstract = {This paper explores the implications of price-dependent demand in spatial models of product differentiation. We introduce consumers with a quasi-linear utility function in the framework of the Salop (1979) model. We show that the so-called excess entry theorem relies critically on the assumption of completely inelastic demand. Our model is able to produce excessive, insufficient, or optimal product variety. A proof for the existence and uniqueness of symmetric equilibrium when price elasticity of demand is increasing in price is also provided.},
address = {Erlangen},
author = {Yiquan Gu and Tobias Wenzel},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {L11; L13; 330; Demand elasticity; Spatial models; Excess entry theorem; Produktdifferenzierung; Monopolistischer Wettbewerb; Preiselastizit\"{a}t; Fixkosten; Hotelling Modell; Theorie},
language = {eng},
number = {03/2009},
publisher = {Univ., Inst. f\"{u}r Wirtschaftspolitik und Quantitative Wirtschaftsforschung},
title = {Product variety, price elasticity of demand and fixed cost in spatial models},
type = {IWQW discussion paper series},
url = {http://hdl.handle.net/10419/29564},
year = {2009}
}
