Most Downloaded Articles
- United-Continental Merger by Carbaugh, Robert J and Ghosh, Koushik
- Market Power and the Lerner Index: A Classroom Experiment by Rojas, Christian
- Capacity-Constrained Monopoly by Baylis, Kathy and Perloff, Jeffrey M
- The Animated Hotelling Model by Switzer, David M
- A Flexible Oligopoly-Oligopsony Model for Classroom Simulations and Policy Analyses by Saitone, Tina L and Sexton, Richard J.
The Animated Hotelling Model
1Saint Cloud State University
Citation Information: Journal of Industrial Organization Education. Volume 5, Issue 1, Pages 1–1, ISSN (Online) 1935-5041, DOI: 10.2202/1935-5041.1036, March 2011
- Published Online:
The Hotelling model is used to illustrate the effects of product differentiation on market outcomes. After introducing the model, we create a demand function for the product and examine the socially optimal amount and scope of variety. We then examine how monopoly and competitive market structures result in too much or too little variety. Finally, extensions of the model are discussed. This presentation uses animation components in both Powerpoint and Flash to illustrate changes in prices and location.