Multiproduct firms: Uniqueness of equilibrium, investment in variety, and welfare

Thomas Favory

Research output: ThesisDoctoral Thesis

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Abstract

This thesis finds that the price equilibrium with multiproduct firms exists and is unique if, for each product, consumers' valuations follow a strictly log-concave distribution. Moreover, if this distribution has an unbounded hazard rate, firms engage in Bertrand competition as they increase their product variety. In that case, firms avoid investing simultaneously in new products, and the effect of variety on welfare is ambiguous. In contrast, if the distribution is a double exponential, the hazard rate is bounded. Firms simultaneously invest in new products and welfare increases to the benefit of consumers.
Original languageEnglish
QualificationDoctor of Philosophy
Awarding Institution
  • The University of Western Australia
Supervisors/Advisors
  • Fiorini, Luciana, Supervisor
  • Wu, Yanrui, Supervisor
Thesis sponsors
Award date7 Oct 2021
DOIs
Publication statusUnpublished - 2021

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