Catalog Competition: Theory and Experiments

Ponència presentada en les XXX Jornadas de Economía Industrial. Alicante, 3-4 septiembre, 2015This paper studies a catalog competition game: two competing firms decide at the same time product characteristics and prices in order to maximize profits. Since Dasgupta and Maskin (1986) it is known that this one-shot Hotelling game admits an equilibrium in mixed strategies but nothing is known about its nature. We consider a discrete space of available product characteristics and continuous pricing and we fully characterize the unique symmetric equilibrium of the catalog competition game for any possible degree of risk aversion of the competing firms. This allows us experimentally test our predictions in both a degenerated and a genuine mixed strategy elicitation mechanism