2015 ,№1

Industrial design in Hotelling model: when product differentiation leads to more price competition


The article demonstrates a new approach to markets with product differentiation, that is of industrial design. Various concepts of industrial design as an effective instrument in modern competition are analysed. Factors of design competitiveness are shown. A Hotelling type model with industrial design is presented. It is concluded that using design as a tool of product differentiation can stimulate more price competition.

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Nadezhda M. Rozanova — Professor, National Research University Higher School of Economics (HSE) (Moscow, Russian Federation;  e-mail: nrozanova@hse.ru).

Yakov A. Migalev – Chief Specialist, Central Research Institute of Economics, Informatics and Control Systems (Moscow, Russian Federation; e-mail: ymigalev@gmail.com).