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Product Variety for Effective Demand Creation

  • Yoshinori ShiozawaEmail author
Chapter
  • 315 Downloads
Part of the Evolutionary Economics and Social Complexity Science book series (EESCS, volume 12)

Abstract

Product variety is a crucial dimension for successful management. While numerous papers deal with this subject, few provide insights into estimating optimal product variety in a concrete situation. Their results are much too sensitive to the assumptions, and their conclusions are often contradictory. This chapter presents a new method to estimate optimal variety for a firm, which depends on the notion of estimated coverage function, defined and explained in the text in detail. All the complex issues related to optimal variety estimation revolve around the estimation of this function, allowing us to discern which issues are crucial and which are not. The formula obtained here is simple and intuitive, and no similar formula has ever appeared in the literature before. It provides various hints regarding optimal variety estimation by means of costs and sales expectations. The results can be extended to the case of oligopolistic competition, and our investigation is concluded by drawing a comparison between a monopoly case and an oligopoly case.

Notes

Acknowledgments

Professor Takahiro Fujimoto of Tokyo University is gratefully acknowledged for sparking the author’s interest in this topic. Without his encouragement, the author would not have dared start any investigation into product variety.

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Copyright information

© Springer Japan KK, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Osaka City UniversityOsakaJapan

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