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We develop a model of vertical innovation in which firms incur a market entry cost and choose a unique level of quality. Once established, firms compete for market shares, selling to consumers with heterogeneous tastes for quality. The equilibrium of the pricing game exists and is unique within...
Persistent link: https://www.econbiz.de/10013315485
-Nash equilibria in a duopoly. Comparing equilibrium prices to the prices set by a multiproduct monopolist, we show that competition … drives prices up and may lead to price dispersion. Competition reduces total surplus in the short run but provides higher …
Persistent link: https://www.econbiz.de/10013318833
We investigate the effect of better access to foreign markets on innovation strategies of multi-product firms in industries with different scope for product differentiation. Industry-specific demand and cost linkages induce a distinction between the returns to innovation. In differentiated...
Persistent link: https://www.econbiz.de/10013020507
We study the dynamics of competition in a model with network effects, an incumbent and entry. We propose a new way of …
Persistent link: https://www.econbiz.de/10012994193
This paper analyzes persuasive advertising and pricing in oligopoly if firms sell differentiated products and consumers have heterogeneous social attitudes towards the consumption by others. Deriving product demand from primitives, we show that the demand-enhancing effect of persuasive...
Persistent link: https://www.econbiz.de/10013124388
same time increases competition. As a result, the platform lowers the firm fees and raises the consumer charges. In … competition. In this case, the platform raises both the charge to the consumers and the fee for the firms …
Persistent link: https://www.econbiz.de/10012772229
perfectly observable. In a two-stage competition, duopolistic firms are subject to strict liability and segment the market such …
Persistent link: https://www.econbiz.de/10013023185
We study final product manufacturers' incentives to introduce new products into the market and how they are affected by a merger among them. We show that when manufacturers distribute their products through multi-product retailers, a manufacturers merger, although it leads to an increase in the...
Persistent link: https://www.econbiz.de/10013047344
extract consumer rent. Lower physical trade costs of shipping make Bertrand price competition fiercer in differentiated …, consumers perceive an entrant's difference to existing products as less pronounced, so a consumer's virtual distance costs in … can therefore explain why FDI has become more frequent in recent periods in the presence of falling trade costs. Cross …
Persistent link: https://www.econbiz.de/10013060458
In this paper, we explore the role of trade in differentiated final goods as well offshoring of tasks for inequality both within and between countries. We emphasize the distinction between managerial and production labor. Production labor is assumed to be a variable input composed of tradable...
Persistent link: https://www.econbiz.de/10013316113