Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/165955 
Authors: 
Year of Publication: 
2016
Series/Report no.: 
Memorandum No. 12/2016
Publisher: 
University of Oslo, Department of Economics, Oslo
Abstract: 
Using a model of horizontal differentiation where a variety dimension is added to Hotelling's (1929) "linear city" duopoly model, I show that even when costs and demand are symmetric, price discrimination may be an equilibrium phenomenon. In the model each customer have a preferred variety and a preferred firm. They have perfect information about all prices and may be induced to switch variety and firm given a sufficient price difference. Price discrimination equilibrium exists when a sufficient fraction of consumers are elastic both with respect to variety and firm.
Subjects: 
Duopoly
price discrimination
JEL: 
D43
Document Type: 
Working Paper

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