TASTE FOR VARIETY AND OPTIMUM PRODUCT DIVERSITY IN AN OPEN ECONOMY

TASTE FOR VARIETY AND OPTIMUM PRODUCT DIVERSITY IN AN OPEN ECONOMY

ABSTRACT We extend the Benassy‘taste for variety’ model to an open economy setting. With the Benassy effect, the market equilibrium is inefficient, openness reduces the varieties provided in the unconstrained optimum and there are potential gains from international coordination.

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Veröffentlicht in:Bulletin of economic research 2009-04, Vol.61 (2), p.127-138
Hauptverfasser: Coto-Martínez, Javier, García-Alonso, María D. C., Levine, Paul
Format: Artikel
Sprache:eng
Schlagworte:
Benassy effect
Consumer demand
Coordination
D43
Economic models
F12
Market equilibrium
Market theory
Monopolistic competition
New products
Open economies
open economy
Studies
taste for variety
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Zusammenfassung:ABSTRACT We extend the Benassy‘taste for variety’ model to an open economy setting. With the Benassy effect, the market equilibrium is inefficient, openness reduces the varieties provided in the unconstrained optimum and there are potential gains from international coordination.
ISSN:0307-3378
1467-8586
DOI:10.1111/j.1467-8586.2008.00296.x