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The Competitive Effects of Price-Floors.

Bhaskar, V

Abstract

Using Hotelling's model of locational competition, the author shows that a moderate price floor destroys the maximal differentiation equilibrium, resulting in minimum differentiation. Equilibrium prices are lower than prices in the absence of a floor. A low price floor can lead to multiple equilibria, with both minimum and maximum differentiation as possible outcomes. Copyright 1997 by Blackwell Publishing Ltd

Publication details

Download	http://www.blackwell-synergy.com/servlet/useragent?func=synergy&synergyAction=showTOC&journalCode=joie&volume=45&issue=3&year=1997&part=null
Repository	RePEc (Germany)
Type	article