Citation

Discussion Paper Details

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Title: Competition, Product Proliferation and Welfare: A Study of the U.S. Smartphone Market

Author(s): Ying Fan and Chenyu Yang

Publication Date: August 2016

Keyword(s): endogenous product choice, merger, product proliferation and smartphone industry

Programme Area(s): Industrial Organization

Abstract: This paper studies (1) whether, from a welfare point of view, oligopolistic competition leads to too few or too many products in a market, and (2) how a change in competition affects the number and the composition of product offerings. We address these two questions in the context of the U.S. smartphone market. Our findings show the market contains too few products and that a reduction in competition decreases both product number and product variety. These results suggest that merger policies should be stricter when we take into account the effects of a merger on product choice in addition to those on pricing.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=11423

Bibliographic Reference

Fan, Y and Yang, C. 2016. 'Competition, Product Proliferation and Welfare: A Study of the U.S. Smartphone Market'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=11423