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Hotelling's law is an observation in economics that in many markets it is rational for producers to make their products as similar as possible. This is also referred to as the principle of minimum differentiation as well as Hotelling's linear city model. The observation was made by Harold Hotelling (1895–1973) in the article "Stability in Competition" in the Economic Journal in 1929.[1]
The opposing phenomenon is product differentiation, which is usually considered to be a business advantage if executed properly.
- ^ Hotelling, Harold (1929), "Stability in Competition" (PDF), Economic Journal, 39 (153): 41–57, doi:10.2307/2224214, JSTOR 2224214, archived from the original (PDF) on 2016-02-21, retrieved 2014-10-20