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Author : G. De Fraja
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (597 download)
Download or read book Product Line Competition in Vertically Differentiated Markets written by G. De Fraja and published by . This book was released on 1989 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Luca Lambertini
Publisher : Edward Elgar Publishing
ISBN 13 : 9781781958315
Total Pages : 240 pages
Book Rating : 4.9/5 (583 download)
Download or read book The Economics of Vertically Differentiated Markets written by Luca Lambertini and published by Edward Elgar Publishing. This book was released on 2006-01-01 with total page 240 pages. Available in PDF, EPUB and Kindle. Book excerpt: 'This is a high-quality book on an important and central topic in the theory of industrial organisation. It is a cohesive and extremely well written volume which is destined to become a standard work on the subject.' - Mark Casson, University of Reading, UK This original new book offers a comprehensive and engaging perspective on the theory of vertical differentiation. It enables the reader to grasp the key concepts and effects that product quality has both on firms' behaviour and market structure, and the ways in which this relationship has evolved. With contributions from prominent figures in the field, the book investigates a number of important topics, such as the choice of the optimal product range, profit sharing, the existence of equilibrium in duopoly games, positional effects attached to status goods, international trade, collusion, advertising and the dynamics of capital accumulation for quality improvement and product innovation. Using both static and dynamic approaches, these aspects are assessed in relation to the manifold issues of regulation, competition policy and trade policy. Product differentiation and its influence on consumer behaviour and the performance of firms is a core topic in the existing literature in the fields of industrial organization, international trade and economic growth. This book will be an essential read for researchers, students and professional scholars working in these areas, especially those with an interest in antitrust regulation.
Author : John Beath
Publisher : Cambridge University Press
ISBN 13 : 9780521335522
Total Pages : 220 pages
Book Rating : 4.3/5 (355 download)
Download or read book The Economic Theory of Product Differentiation written by John Beath and published by Cambridge University Press. This book was released on 1991-02-22 with total page 220 pages. Available in PDF, EPUB and Kindle. Book excerpt: There are few industries in modern market economies that do not manufacture differentiated products. This book provides a systematic explanation and analysis of the widespread prevalence of this important category of products. The authors concentrate on models in which product selection is endogenous. In the first four chapters they consider models that try to predict the level of product differentiation that would emerge in situations of market equilibrium. These market equilibria with differentiated products are characterised and then compared with social welfare optima. Particular attention is paid to the distinction between horizontal and vertical differentiation as well as to the related issues of product quality and durability. This book brings together the most important theoretical contributions to these topics in a succinct and coherent manner. One of its major strengths is the way in which it carefully sets out the basic intuition behind the formal results. It will be useful to advanced undergraduate and graduate students taking courses in industrial economics and microeconomic theory.
Author : Liwen Chen
Publisher :
ISBN 13 :
Total Pages : 340 pages
Book Rating : 4.:/5 (73 download)
Download or read book Issues in Operations Management and Marketing Interface Research written by Liwen Chen and published by . This book was released on 2010 with total page 340 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation studies important issues in supply chain management and marketing interface research: competition, product line design, and channel efficiency, at the presence of vertically differentiated products. Vertical differentiation as a means of price discrimination has been well-studied in both economics and marketing literature. However, less attention has been paid on how vertical differentiation has been operationalized. In this dissertation, we focus our study on two types of vertical differentiation: the one created by a product line which is produced by the same firm, and the one created by products from different firms. We especially are interested in the so-called private label products vs. the national brand products. Specifically, this dissertation explores how vertical differentiation can affect the interactions among the members of a supply chain in several different contexts. In the first piece of work, we use a game theoretic model to explore how the ability of a retailer to introduce a private label product affects its interaction with a manufacturer of a national brand. In the second essay, we are investigating how an original equipment manufacturer (OEM) will be affected by the entry of a competitor when there are strategic suppliers of a critical component. If these suppliers behave strategically, it is not clear that the entry of other players will necessarily be harmful to the incumbent. In the last work, we pay our attention to an emerging change happening in the industry: some retailers begin to sell their private labels through their competitors. We investigate the strategic role of a retailer selling her own private label products through another retailer. In summary, this dissertation illustrates how vertical differentiation play a crucial role in firms' supply chain as well as marketing strategies. Therefore, it is important for firms to recognize these strategic issues related to vertically differentiated products while making operations/marketing decisions.
Author : Ralph Siebert
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book The Introduction of New Product Qualities by Incumbent Firms written by Ralph Siebert and published by . This book was released on 2015 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study analyzes the optimal provision of goods in a market characterized by vertical product differentiation. We consider a duopoly model in which incumbents may introduce a new product with certain quality, and decide whether to keep or to withdraw the existing product from the market. We find that the strategic and cannibalization effects dominate, such that no room is left for discrimination among consumers. The innovator always withdraws the existing product from the market, in order to reduce price competition and to avoid cannibalizing its new product demand. In contrast to horizontally differentiated markets, firms are better off not to offer a range or interval of product qualities in vertically differentiated markets. Hence, firms fare better, despite offering a smaller variety of goods.
Author : Brandon James Hoffman
Publisher :
ISBN 13 :
Total Pages : 182 pages
Book Rating : 4.:/5 (11 download)
Download or read book Modeling Vertical Markets of Differentiated Goods written by Brandon James Hoffman and published by . This book was released on 2017 with total page 182 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is a collection of essays on the topic of vertical markets and resellers. The first two chapters look at the effects of mandatory dealer laws on prices and profits in vertical markets with differentiated goods. The third chapter looks at the quality of products chosen when manufacturers use resellers compared to when they do not. All three chapters show that competition is lessened when mandatory dealer laws exist. Chapter 1 addresses the US automobile market which has laws in almost every state that require sales of new vehicles go through franchised dealers, and manufacturers are not allowed to sell directly to consumers. While vertical markets can provide many benefits to both producer and consumer alike, double-marginalization is often seen as a problem for producers and consumers with vertical markets; whereby firms on different levels both have market power and thus are both able to charge a markup over cost. Contracts and implicit agreements can mitigate or lessen the negative externality associated with double-marginalization, but I develop a model to show that double-marginalization can be a good thing for producers, while simultaneously being bad for consumers. The model has a single dimension on product differentiation and different levels of vertical markets. In this model, firms either sell to consumers or other firms. How far removed the manufacturer of the good is from the final consumer determines the number of vertical markets. A market with one level consists of a manufacturer who sells directly to consumers, while a market with two levels consists of a manufacturer who sells to a reseller who in turn sells to consumers. I find that the profits of the manufacturer of the good can be up to three times as high when there are two levels instead of one and that they will always be at least twice as high. This model also shows that manufacturers can benefit from the existence of a law that requires they use dealers, even though any one single manufacturer has an incentive to not use a dealer. Chapter 2 addresses mandatory dealer laws in a setting without perfectly inelastic demand. Under a certain set of circumstances, manufacturers can earn higher profits after the introduction of these mandatory dealer laws than they would be without them. In this chapter, I remove the perfectly inelastic total demand restriction, and instead show how the elasticity of total demand plays a role in a manufacturer's preference for a mandatory dealer law. For the model used in this paper, I find that total demand does not need to be very inelastic at all, and in fact, can be elastic at the equilibrium prices and quantities. The findings in this paper run contrary to expectation, where double-marginalization is something that hurts manufacture's profits. In chapter 3, I analyze the benefit of moving first in a vertically differentiated market with manufacturers and retailers. Both retailers and manufactures are assumed to be profit-maximizing entities. Here the choice of the incumbent manufacturer creates an indifference between entering with a higher quality or entering with a lower quality for the entering manufacturer. Entry-quality decisions and wholesale pricing are related to the competition of retailers selling the manufacturers product and the degree of consumers' taste for quality. I examine the indifference of the entering manufacturer and highlight the benefits of being able to set quality first as an incumbent manufacturer when pricing stages are simultaneous. Stackelberg competition in the quality stage allows for the possibility for inferior-quality entry as well as superior-quality entry. The first-mover advantage dominates the high-quality advantage in this setting which is consistent with my findings in the dock and boat-lift markets.
Author : Tarek H. Selim
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book Spatial Competition in a Differentiated Market with Asymmetric Costs written by Tarek H. Selim and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Spatial quality choice is introduced, where consumers are horizontally differentiated by taste and firms vertically differentiated by quality location, within an equilibrium model of duopoly competition characterized by asymmetric fixed and variable costs. Firms choose quality location followed by prices but then may vertically re-locate their quality offerings based on changing horizontal consumer taste. A monopolistic equilibrium solution arises with firms achieving positive economic profits through price-quality markups exceeding marginal costs. Under strict inequality conditions, each firm acts as a monopolistic competitor within a range of quality choices governed by multiple relative differentiation outcomes. On the other hand, vertical re-location exhibits a resistance to change on the part of vertically located firms such that firms dislike quality re-location and prefer stable preferences in quality. Such resistance to change is overcome by firms re-locating their quality offerings to maximize monopolistic brand-space gains. It is argued that more horizontal differentiation may force more product differentiation by vertical quality relocation. A relative change in quality preferences may result in wider quality spreads in the market through vertical quality re-locations, even though the resistance to change arguments may still hold good.
Author : James Albrecht
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (129 download)
Download or read book Vertical Differentiation in Frictional Product Markets written by James Albrecht and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We consider a version of the imperfect competition model of Butters (1977), Varian (1980) and Burdett and Judd (1983) in which sellers make an ex-ante investment in the quality of their variety of the product. Equilibrium exists, is unique and is efficient. In equilibrium, search frictions not only cause sellers to offer different surpluses to buyers but also cause sellers to choose different qualities for their varieties. That is, equilibrium involves endogenous vertical differentiation. As search frictions decline, the market becomes more and more unequal as a smaller and smaller fraction of sellers produces varieties of increasing quality, offers increasing surplus to their customers, and captures an increasing share of the market, while a growing fraction of sellers produces varieties of decreasing quality. Gains from trade and welfare grow. Under some conditions, the growth rate of gains from trade and welfare is constant.
Author : Thomas Jungbauer
Publisher :
ISBN 13 :
Total Pages : 38 pages
Book Rating : 4.:/5 (13 download)
Download or read book Branding Vertically Differentiated Product Lines written by Thomas Jungbauer and published by . This book was released on 2020 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: The decision whether a multi-product firm offers its goods under a joint or separate brands is essential for its success. When selling vertically differentiated products, it needs to consider the interplay of branding spillovers, pricing and cannibalization. We study the problem of a firm selling vertically differentiated products deciding whether to sell its products under a joint or separate brands. The analysis accounts for the positive and negative spillover effects between jointly branded products previously established in the literature. Our findings suggest that joint branding is optimal when spillover effects are either high or low but not when they are intermediate. When spillover effects are low, firms jointly brand to save the cost of building a second brand. In contrast, when spillover effects are high, the firm chooses joints branding because it is inherently more profitable even if building additional brands is free. When spillover effects are intermediate, however, firms opt for separate branding despite the additional cost of building more brands. We also extend the analysis to investigate the effect of low-end strategic competition and find that this kind of competition pushes the multi-product line firm towards joint branding. Finally, our modeling approach explains why some firm use hybrid (endorsed) branding to dampen the spillover effects compared to pure joint branding.
Author : Jian Shen
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book Competitive Nonlinear Pricing and Contract Variety written by Jian Shen and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze markets with both horizontally and vertically differentiated products under both monopoly and duopoly. In the base model with two consumer types, we identify conditions under which entry prompts an incumbent to expand or contract its low end of the product line. Our analysis offers a novel explanation for the widespread use of 'fighting brands' and 'product line pruning.' We also extend our analysis to asymmetric firms and three types of consumers and show that depending on the specific environment, entry may lead the incumbent to expand or contract the middle range of its product line (middle contracts). Our results are mainly driven by interactions between horizontal differentiation (competition) and vertical screening of consumers.
Author : Dr Harrison Sachs
Publisher :
ISBN 13 :
Total Pages : 26 pages
Book Rating : 4.6/5 (27 download)
Download or read book The Product Differentiation Marketing Strategy Defined, The Benefits Of Companies Using A Product Differentiation Marketing Strategy In Foreign Markets, And Internet Marketing Tactics That Can Help Brands written by Dr Harrison Sachs and published by . This book was released on 2020-03-02 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: This essay sheds light on the benefits appertaining to utilizing a product differentiation marketing strategy in foreign markets and identifies internet marketing tactics that can help brands facilitate the successful implementation of the product differentiation strategy in foreign markets. "Product differentiation is a marketing strategy that businesses use to distinguish a product from similar offerings on the market. For small businesses, a product differentiation strategy may provide a lasting competitive advantage in a market dominated by larger companies. For instance, the the product differentiation strategy also allows business to compete in areas other than price" (Kelchner) which ultimately allows brands to create perceived value and charge premium prices for their products. Moreover, the implementation of a successful product differentiation strategy fosters "brand loyalty among customers. Furthermore, this marketing strategy may create the perception that there's no substitute available on the market. Although competitors may have similar products, a product differentiation strategy that focuses on the quality or design differences which other products do not have allows brands to attain a competitive advantage in the market, as customers view the product as unique" (Kelchner). The successful implementation of the product differentiation strategy allows brands to also cultivate brand equity, positive brand recognition, and brand growth. Moreover, brands can attain profit maximization when they are able to successfully distinguish themselves from their competitors and offer services and products that customers are willing to pay top dollar for based on perceived value and uniqueness. The utilization of the product differentiation strategy has allowed many companies to financially flourish, such as Apple and Microsoft. Internet marketing tactics, such as posting video content onto social media websites that flaunt the unique product lines and sending out email blasts that highlight the merits of the products, can be employed to help brands facilitate the successful implementation of the product differentiation strategy in foreign markets.
Author : Mark B. Vandenbosch
Publisher : London : Western Business School, University of Western Ontario
ISBN 13 : 9780771414244
Total Pages : 44 pages
Book Rating : 4.4/5 (142 download)
Download or read book Product and Price Competition in a Two-dimensional Vertical Differentiation Model written by Mark B. Vandenbosch and published by London : Western Business School, University of Western Ontario. This book was released on 1992 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Alberto Cavaliere
Publisher :
ISBN 13 :
Total Pages : 31 pages
Book Rating : 4.:/5 (249 download)
Download or read book Price competition with information disparities in a vertically differentiated duopoly written by Alberto Cavaliere and published by . This book was released on 2004 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Product Innovation Under Vertical Differentiation and the Persistence of Monopoly written by and published by . This book was released on 1995 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The incentives to innovate for the incumbent and the entrant in a vertically differentiated market are analised, in the absence of uncertainty. It turns out that if consumers marginal willingness to pay for quality is sufficiently low, the efficiency effect observationally works so as to favour innovation by the entrant, i.e., competition. Otherwise, it operates to the advantage of the incumbent who acquire the right to innovate, preempting thus the rival.
Author : Dirk Bergemann
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book Entry and Vertical Differentiation written by Dirk Bergemann and published by . This book was released on 2015 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the entry of new products into vertically differentiated markets where an entrant and an incumbent compete in quantities. The value of the new product is initially uncertain and new information is generated through purchases in the market. We derive the (unique) Markov perfect equilibrium of the infinite horizon game under the strong long run average payoff criterion. The qualitative features of the optimal entry strategy are shown to depend exclusively on the relative ranking of established and new products based on current beliefs. Superior products are launched relatively slowly and at high initial prices whereas substitutes for existing products are launched aggressively at low initial prices. The robustness of these results with respect to different model specifications is discussed.
Author : W. Chan Kim
Publisher : Hachette Books
ISBN 13 : 0316314056
Total Pages : 312 pages
Book Rating : 4.3/5 (163 download)
Download or read book Blue Ocean Shift written by W. Chan Kim and published by Hachette Books. This book was released on 2017-09-26 with total page 312 pages. Available in PDF, EPUB and Kindle. Book excerpt: NEW YORK TIMES BESTSELLER #1 WALL STREET JOURNAL BESTSELLER Blue Ocean Shift is the essential follow up to Blue Ocean Strategy, the classic and over 4 million copy global bestseller by world-renowned professors W. Chan Kim and Renee Mauborgne. Drawing on more than a decade of new work, Kim and Mauborgne show you how to move beyond competing, inspire your people's confidence, and seize new growth, guiding you step-by-step through how to take your organization from a red ocean crowded with competition to a blue ocean of uncontested market space. By combining the insights of human psychology with practical market-creating tools and real-world guidance, Kim and Mauborgne deliver the definitive guide to shift yourself, your team, or your organization to new heights of confidence, market creation, and growth. They show why nondisruptive creation is as important as disruption in seizing new growth. Blue Ocean Shift is packed with all-new research and examples of how leaders in diverse industries and organizations made the shift and created new markets by applying the process and tools outlined in the book. Whether you are a cash-strapped startup or a large, established company, nonprofit or national government, you will learn how to move from red to blue oceans in a way that builds your people's confidence so that they own and drive the process. With battle-tested lessons learned from successes and failures in the field, Blue Ocean Shift is critical reading for leaders, managers, and entrepreneurs alike. You'll learn what works, what doesn't, and how to avoid the pitfalls along the way. This book will empower you to succeed as you embark on your own blue ocean journey. Blue Ocean Shift is indispensable for anyone committed to building a compelling future.
Author : Yong-Hwan Noh
Publisher :
ISBN 13 :
Total Pages : 218 pages
Book Rating : 4.:/5 (68 download)
Download or read book Essays on Vertical Product Differentiation written by Yong-Hwan Noh and published by . This book was released on 2005 with total page 218 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation explores models of heterogeneous product markets that rely on the "vertical product differentiation" formulation. The demand structure applied here is the covered-market configuration under the vertical product differentiation. With this specification, product market equilibria of the monopoly and duopoly market are derived. In particular, parameter restrictions on the degree of relative consumer heterogeneity associated with the covered-market setting are identified and used to interpret analytical results. Based on the specified demand structure, I revisit two industrial organization topics from the perspectives of vertical product differentiation. The first essay analyzes the entry of a new product into a vertically differentiated market where an entrant and an incumbent compete in prices. Many models on strategic entry deterrence deal with "limit quantities" as the established firm's strategic tool to deter or accommodate entry. Here, however, the entry-deterrence strategies of the incumbent firm rely on "limit qualities". With a sequential choice of quality, quality-dependent marginal production cost, and a fixed entry cost, I relate the entry-quality decision and the entry-deterrence strategies to the level of an entry cost and the degree of consumer heterogeneity. In particular, the incumbent influences the quality choice of the entrant by choosing its quality level before the entrant. This allows the incumbent to "limit" the entrant's entry decision and quality levels. Quality-dependent marginal production costs in the model entail the possibility of inferior-quality entry as well as the incumbent's aggressive entry-deterrence strategies by increasing its quality level towards potential entry. Welfare evaluation confirms that social welfare is not necessarily improved when entry is encouraged rather than deterred. The second essay is motivated by some specific economic questions that have arisen with the introduction of 'genetically modified' (GM) agricultural products. A duopoly market-entry model associated with the vertical product differentiation is developed to show how the existence of segregation costs biases the firm's quality choice behavior. Thus, the key factor of the model is the cost of segregation activities that are necessary to distinguish GM products from non-GM products. With an increasing and convex cost of quality, the model predicts that the entrant firm has an increased incentive to enter the market with a low-quality good to reduce production costs if segregation costs are sufficiently high. When consumers are homogeneous enough, however, entry may occur with the high-quality good.
