Publication Number: 2024-11
Publication Date: November 2024
We trace the origins of the definition of the “quality variable” used in the theory of
product differentiation, which states that quality is unanimously appreciated by
consumers, entails a higher unit cost for firms, is unidimensional and continuous. We
also document the transition from a diagrammatic treatment of the issue of product
quality to an algebraic one in this theory. To do so, we examine two articles published
a year apart in the American Economic Review: an article written by Lawrence Abbott
(1953) and an article written by Robert Dorfman and Peter Otto Steiner (1954).
