- July 2013
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International Standard Serial Number (ISSN)
- In this article, we show that in models where location is endogenous, maximum welfare losses arising from non-optimal locations or from the lack of market coverage may be substantial. In contrast, maximum welfare losses arising from non-optimal quality choices are more modest, but they might vary discontinuously with the dispersion in consumer tastes. Very often, welfare losses can be inferred from data.
- welfare losses; horizontal differentiation; hotelling model; salop model; vertical differentiation