Monopolistic Competition and New Products: a Conjectural Equilibrium Approach

In this paper we generalize the heterogeneous risk adverse agents model of diffusion of new products in a multi-firm, heterogeneous and interacting agents environment. We use a model of choice under uncertainTY based on Bayesian theory. We discuss the possibiliTY of product failures, the set of equilibria, their stabiliTY and some welfare properties.

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