Incentive

Context (archaeology)

Product (mathematics)

Ecology

Biology

Microeconomics

Product differentiation

Oligopoly

Market power

Economics

Market economy

Monopoly

Business

Paleontology

Competition (biology)

Mathematics

Product market

Welfare

Geometry

Point (geometry)

Industrial organization

American Economic Journal Microeconomics

This paper studies (1) whether, from a welfare point of view, oligopolistic competition leads to too few or too many products in a market, and (2) how a change in competition affects the number and the composition of product offerings. We address these two questions in the context of the US smartphone market. Our findings show that this market contains too few products and that a reduction in competition decreases both the number and variety of products. These results suggest that product choice adjustment may exacerbate the welfare effect of a merger. (JEL D43, G34, K21, L13, L41, L63)

Competition, Product Proliferation, and Welfare: A Study of the US Smartphone Market