2002/05 LEM Working Paper Series

The Max-Min Principle of Product Differentiation: An Experimental Analysis.
A. Mangani and P. Patelli
TTheoretical models of multidimensional product differentiation predict that in duopoly firms differentiate maximally along one dimension and minimally along the other dimensions. We experimentally reproduce a market in which firms can differentiate their products along two horizontal dimensions. The main result is that subjects do not differentiate their products and locate near the center consumers' distribution.

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