Locating inside the Salop circle: Demand rotations in a micro-founded model

Bar-Isaac, Heski and Caruana, Guillermo and Cuñat, Vicente (2013): Locating inside the Salop circle: Demand rotations in a micro-founded model.

Abstract

We present a micro-founded model of design, that provides a framework in which design leads to demand rotations. We show simple sufficient conditions that determine when design should be extreme (fully standardized or fully tailored) or rather be only partially tailored.

• Item Type: MPRA Paper
• Language: English
• Keywords: Demand Rotations, Salop Circle, Product Design
• Subjects: D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory; L - Industrial Organization > L0 - General > L00 - General

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