Abstract.
By studying the effect of different patterns of demand in an evolutionary selection model this paper shows how product differentiation reduces competitive selection pressure and thus increases the chances for the coexistence of firms. With the example of a duopoly it shows that: (1) a monopoly is the likely outcome of competition in homogeneous products, (2) although product differentiation does not preclude a monopoly it greatly improves the chances for the stable coexistence of firms in the long run, and (3) the more differentiated the products, the more stable the duopoly.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Author information
Authors and Affiliations
Corresponding author
Additional information
JEL Classification:
B52, L11
This study has benefited from insightful comments and suggestions of two anonymous referees as well as from discussions with Michael Peneder, Werner Hölzl, and Harry Bloch. I would also like to thank Dennis C. Mueller and Gustav Feichtinger for supervising my doctoral thesis preceding this paper.
Rights and permissions
About this article
Cite this article
Kaniovski, S. Product differentiation and competitive selection. J Evol Econ 15, 567–580 (2005). https://doi.org/10.1007/s00191-005-0268-6
Issue Date:
DOI: https://doi.org/10.1007/s00191-005-0268-6