Hotelling's law on product similarity: Difference between revisions
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'''Hotelling's law on product similarity''' states that it is rational for producers of similar goods to make their goods as similar as possible, since each producer is trying to make his or her goods as close to the mainstream as possible. This is the opposing phenomenon to [[product differentiation]]. | '''Hotelling's law on product similarity''' states that it is rational for producers of similar goods to make their goods as similar as possible, since each producer is trying to make his or her goods as close to the mainstream as possible. This is the opposing phenomenon to [[product differentiation]]. | ||
This law is also known as the '''principle of minimum differentiation'''. | |||
Latest revision as of 16:21, 25 September 2011
Statement
Hotelling's law on product similarity states that it is rational for producers of similar goods to make their goods as similar as possible, since each producer is trying to make his or her goods as close to the mainstream as possible. This is the opposing phenomenon to product differentiation.
This law is also known as the principle of minimum differentiation.