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We study product differentiation in the mutual fund industry. We design a model in which funds with heterogeneous perceived quality can choose their level of product differentiation. In equilibrium, high quality funds choose broad market designs (i.e., low differentiation) appealing to many investors, while low quality funds adopt niche designs (i.e., high differentiation) that investors either love or loath. Using as a measure of fund differentiation the degree of textual uniqueness of investment strategy description in fund prospectuses, we confirm empirically that funds with lower expected performance tend to differentiate more. We use the issuance of Morningstar rating to previously unrated funds as an exogenous shock to perceived quality to identify the economic mechanism. We find that funds receiving a low rating increase their product differentiation. The effect is mainly concentrated on funds run by small management companies, a feature associated with lower performance. This increase in product differentiation makes funds more likely to survive. It also has a market-level impact on the menu of funds available to investors.

With the rapid development and application of distributed generation, more and more attention has been paid to the operation and control technology of the wind storage isolated network system. As a kind of new energy application, the operation of wind storage isolated network system has a great technical advantage in the process of operation. Aiming at the problem of self starting and stable operation of the wind storage isolated network system, a flexible self starting method of wind storage isolated network system based on Petri network model for power deviation prediction model is proposed, and the mathematical model and control strategy of system module are established. Based on the established mathematical model and control strategy, the electromagnetic transient simulation model is built in the PSCAD environment. The simulation results show that the power control strategy of energy storage system based on Petri network can be more effective and reliable, which is provided technical basis and practical method for the operation and control of wind storage isolated network system.