Strategic segmentation: when two monopolies are better than one

In this article we show that the price and the profit of an incumbent firm may increase after a new firm enters its market. Our analysis suggests that a well-established firm after competition emerges on its market might benefit from excluding some consumers from the low- end segment and concentrate only on its loyal consumers. We also find that strategic de-marketing can increase social welfare.

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Year of publication:	2014-07-28
Authors:	Bakó, Barna ; Kálecz-Simon, András
Publisher:	Corvinus University of Budapest Department of Microeconomics

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Type of publication:	Book / Working Paper
Language:	English
Notes:	Bakó, Barna and Kálecz-Simon, András (2014) Strategic segmentation: when two monopolies are better than one. Working Paper. Corvinus University of Budapest Department of Microeconomics. (Unpublished)
Source:	BASE

Persistent link: https://www.econbiz.de/10010435082