Abstract
Modern food industries offer consumers an ever-increasing range of products. For instance, during the period from 1985 to 1990 more than a thousand new products were introduced to the German market for milk products (Meyer, 1992, p. 72). To the consumer, the rising number of products means that there is a greater chance of selecting a product with the combination of properties that best fits his preferences. The closer the chosen brand gets to his ideal combination of properties, the higher his utility will be. However, he faces rising costs due to increasing search and information processing, both of which will lower his utility or surplus. Thus the question arises to what extent the consumer can actually benefit from enlarged product variety. A Hotelling type model of horizontal product differentiation is the basis for a simulation study in which answers to this question are sought by systematically varying consumer behavior and firm strategies of product positioning.
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© 1997 Springer Science+Business Media New York
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Böcker, A. (1997). Consumer Search and Surplus in Markets with Differentiated Food Products. In: Wierenga, B., van Tilburg, A., Grunert, K., Steenkamp, JB.E.M., Wedel, M. (eds) Agricultural Marketing and Consumer Behavior in a Changing World. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-6273-3_12
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DOI: https://doi.org/10.1007/978-1-4615-6273-3_12
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