On Firms' Preferences for Product Differentiation

We examine firms' preferences for product differentiation when a firm has a demand-side and/or a cost-side advantage over its competitor. We show that if the magnitude of these advantages is small, then both firms prefer more differentiated products. However, if the magnitude of demand-side (cost-side) advantage is larger, then only the advantaged (disadvantaged) firm prefers more differentiated products.

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Year of publication:	2005
Authors:	Tyagi, Rajeev
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 12.2005, 17, p. 1-8
Publisher:	AccessEcon
Subject:	Competition

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Extent:	application/pdf
Type of publication:	Article
Language:	English
Classification:	L1 - Market Structure, Firm Strategy, and Market Performance ; D4 - Market Structure and Pricing
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005416991