Journal article


Trade and Variety in a Model of Endogenous Product Differentiation


Publication Details
Author(s): Lorz O, Wrede M
Publisher: Walter de Gruyter
Publication year: 2009
Volume: 9
ISSN: 1935-1682
Language: English

Abstract

This paper sets up a model of endogenous product differentiation to analyze the variety effects of international trade. In our model multi-product firms decide not only about the number of varieties they will supply but also about the degree of horizontal differentiation between these varieties. Firms can raise the degree of differentiation by investing variety-specific fixed costs. In this setting, we analyze how trade integration, i.e. an increase in market size, influences the number of firms in the market, the number of product varieties supplied by each firm, and the degree of differentiation between these varieties. Copyright © 2009 The Berkeley Electronic Press. All rights reserved.



How to cite
APA: Lorz, O., & Wrede, M. (2009). Trade and Variety in a Model of Endogenous Product Differentiation. B E Journal of Economic Analysis & Policy, 9.

MLA: Lorz, Oliver, and Matthias Wrede. "Trade and Variety in a Model of Endogenous Product Differentiation." B E Journal of Economic Analysis & Policy 9 (2009).

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