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Endogenous Product Differentiation, Market Size and Prices

机译：内生产品差异，市场规模和价格

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摘要

This paper provides a framework to understand how market size affects firms' investments in product differentiation in a model of monopolistic competition. The theory proposes that consumers' love of variety makes them more sensitive to product differentiation efforts by firms, which leads to more differentiated products in larger markets. The framework also predicts an inverted U-shaped effect of trade liberalization on product differentiation, with trade liberalization leading to more differentiated products when starting from autarky but then leading to less differentiated products as the countries approach free trade.
机译：本文提供了一个框架，以了解市场规模如何在垄断竞争模型中影响企业对产品差异化的投资。该理论提出，消费者对多样性的热爱使他们对企业的产品差异化努力更加敏感，从而导致更大市场中的差异化产品。该框架还预测贸易自由化对产品差异的倒U形影响，从自给自足开始，贸易自由化将导致差异化的产品更多，而随着各国接近自由贸易，贸易差异化将导致差异化的产品减少。

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