Often a quality improvement necessitates modifications of varietal product features. This paper studies firms' incentives to invest in quality improving R&D when this decision affects the goods' degree of varietal differention.

Lancasterian models of product differentiation typically assume a one-dimension characteristics space. We show that standard results on prices and locations no longer hold when firms compete in a multi- characteistics space.

The design of distribution channels is an important marketing decision since a revision implies costly reorganization. Hence, it makes sense to study strategic motives of alternative distribution devices. A precommitment is a strategic move that affects the other players'expectations on how...

This paper uses transactions, quotation, and limit order book data to investigate competition between the Brussels CATS market and SEAQ International. It Focuses in more detail on the liquidity (indirect costs) measured by the quoted and effective bid-ask spread.