The literature on mass customization generally focuses on the tradeoff between higher revenues from better matching customer preferences with product specifications, and higher costs of offering a broader--possibly fully customized--product line. Less well understood is the tradeoff between the...

This paper addresses the strategic impact of modular design on the optimal length and price of a differentiated product line. We represent consumer demand with a Bayesian logit model. We also break operations costs into product design and production components. Our analysis shows that reducing...

We examine price competition under product-specific network effects, in a duopoly where the products are differentiated horizontally and vertically. When consumers' expectations are not affected by prices, firms may share the market equally, or one firm (possibly the low-quality one) may capture...

Manufacturers typically sell consumer products through retailers and the presence of intermediaries has interesting ramifications for their product variety and pricing decisions. Retailers may want higher variety to help reduce price competition but the costs of variety are borne by the...

In this paper, we study the standardization and customization decisions of two firms in a competitive setting, along with variety, lead time, and price decisions. We incorporate consumer heterogeneity both in firm preference (or store convenience) and in product attribute preferences. We find...

Demand for variety may arise from a taste for diversity in individual consumption and/or from diversity in tastes when each consumer chooses a single variant. The full degree of variety potentially demanded will not, in general, be supplied because scale economies (even to a small degree) mean...