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Barrett, The Honors College at Arizona State University proudly showcases the work of undergraduate honors students by sharing this collection exclusively with the ASU community.

Barrett accepts high performing, academically engaged undergraduate students and works with them in collaboration with all of the other academic units at Arizona State University. All Barrett students complete a thesis or creative project which is an opportunity to explore an intellectual interest and produce an original piece of scholarly research. The thesis or creative project is supervised and defended in front of a faculty committee. Students are able to engage with professors who are nationally recognized in their fields and committed to working with honors students. Completing a Barrett thesis or creative project is an opportunity for undergraduate honors students to contribute to the ASU academic community in a meaningful way.

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Differentiation on Demand: How Consumer Preferences Shape Product Variety in Hotelling Duopoly

Description
In this paper, a novel model of Hotelling duopoly is introduced that explains horizontal product variety as the result of consumer preferences, expanding on and meshing the works of Hotelling (1929) and Neven (1985). From this model, two opposing forces from consumer preferences are found that impact the variety and…

In this paper, a novel model of Hotelling duopoly is introduced that explains horizontal product variety as the result of consumer preferences, expanding on and meshing the works of Hotelling (1929) and Neven (1985). From this model, two opposing forces from consumer preferences are found that impact the variety and price decisions of firms: market share revenues and price revenues. As firms face consumers with highly linear (weak) preferences over variety, the profit incentive is to simply capture the market by offering products that appeal to the middle consumer. However, as firms face consumers with highly quadratic (strong) preferences over variety, the profit incentive is to carve out and exploit a market segment by offering a distinct variety. Thus, observed product variety between minimal and maximal differentiation is emergent from consumer preferences, as firms face a balance of price and market share incentives.
ContributorsMalaki, Adam (Author) / Leiva Bertran, Fernando (Thesis director) / Hanemann, Michael (Committee member) / Barrett, The Honors College (Contributor) / School of Mathematical and Statistical Sciences (Contributor) / Economics Program in CLAS (Contributor) / School for the Future of Innovation in Society (Contributor)
Created2024-05