This paper explores and quantifies the importance of parent brand state dependence to forward looking pricing outcomes … the parent brand can decrease prices and reduce profits, as well as mitigate or even reverse the benefits of joint profit … maximization relative to sub-brand profit maximization. These effects are mediated by brand asymmetries and the relative magnitude …

brand loyalty in consumers who would otherwise buy the cheapest alternative on the market. This setting, in which persuasive … determined brand loyal consumer bases are not symmetric across firms. This raises a robustness question regarding Varian's “model …