In many markets, firms make their products complex through add-on features, thus making them difficult to evaluate and compare. Does this product obfuscation lure buyers into buying overpriced products, and if so, why does competition not eliminate this practice? More generally, under which...

In many markets, firms make their products complex through add-ons, thus making them difficult to evaluate and compare. How does this product obfuscation affect competition, sellers' profits, and buyers' welfare? We study these questions in a competitive experimental market in which sellers have...

This paper examines if international trade can reduce total welfare in an international oligopoly with differentiated goods. We show that welfare is a U-shaped function in the transport cost as long as trade occurs in equilibrium. With a Cournot duopoly trade can reduce welfare compared to...

We use a vertical product differentiation model under partial market coverage to study the social welfare optimum and duopoly equilibrium when convex costs of quality provision are either fixed or variable in terms of production. We show that, under fixed costs, at the social welfare optimum...

A three-stage game including investments, environmental quality provision and price competition is developed to study the impact of green technology investment (ecolabeling), in a duopoly model of vertical product differentiation. The firms’ incentives to invest in green technologies depend on...

This paper analyses how product differentiation affects the volume of trade under duopoly using Shubik-Levitan demand functions rather than the Bowley demand functions used by Bernhofen (2001). The Shubik-Levitan demand functions have the advantage that an increase in product differentiation...

We study cartel stability in a differentiated price-setting duopoly with returns to scale. We show that a cartel may be equally stable in the presence of lower differentiation, provided that the decreasing returns parameter is high. In addition we demonstrate that for a given factor of discount,...

We consider conflicts between an incumbent, e.g. government or dominant firm, and potential challengers, e.g. guerilla movement or entrants. It is not uncommon for challengers to win such conflicts despite their lack of resources. They can do this by exploiting a second mover advantage: choosing...

Empirical studies on aggregate export behaviour have recently emphasised the role played by innovation as the main force driving product differentiation and competitiveness for developed countries. These studies treat foreign innovation as a variable that affects negatively national export...

Consider a differentiated product market in which all consumers are fully informed about match value and price at the time they make their purchasing decision. Initially, consumers become informed about the prices of all products in the market but do not know the match values. Some consumers...