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Dynamic price competition with price adjustment costs and product differentiation

Vernasca, Gianluigi - 2003

We study a discrete time dynamic game of price competition with spatially differentiated products and price adjustment costs. We characterise the Markov perfect and the open-loop equilibrium of our game. We find that in the steady state Markov perfect equilibrium, given the presence of...

Persistent link: https://www.econbiz.de/10011593786

Optimal Product Variety in a Hotelling Model

Meagher, Kieron J. - 2011

In Hotelling style duopoly location games the product variety (or firm locations) is typically not socially optimal. This occurs because the competitive outcome is driven by the density of consumers at the margin while the socially optimal outcome depends on the whole distribution of consumer...

Persistent link: https://www.econbiz.de/10014043296

Quality differentiation if market share matters

Ellert, Alexander; Urmann, Oliver - 2010

Using a vertical differentiation model, we investigate the product quality strategies of two competing firms maximizing market shares. The firms are facing variable costs of quality improvement and choose their prices under the constraint of nonnegative profits. We show that in equilibrium there...

Persistent link: https://www.econbiz.de/10008757547

Uncertain Spatial Demand and Price Flexibility : A State Space Approach to Duopoly

Meagher, Kieron J. - 2011

In spatial competition firms are likely to be uncertain about demand when launching products either because of shifting demographics or of asymmetric information about preferences. This paper considers two types of prices: those set on prior information and flexible prices which adjust across...

Persistent link: https://www.econbiz.de/10013128129

Non-price effects of mergers and acquisitions

Haucap, Justus; Stiebale, Joel - 2023

In this paper, we summarize the economic literature on non-price effects of mergers and acquisitions (M&As). Specifically, we discuss the effects of M&As on innovation, product variety, and sustainability. Although the relationship is theoretically ambiguous, the vast majority of ex-post...

Persistent link: https://www.econbiz.de/10014310467

Product Repositioning by Merging Firms

Atalay, Enghin; Sorensen, Alan T.; Sullivan, Christopher J. - National Bureau of Economic Research - 2023

We examine merging firms' additions and removals of products for a sample of 66 mergers across a wide variety of consumer packaged goods markets. We find that mergers lead to a net reduction in the number of products offered by merging firms. Merging firms tend to both drop and add products at...

Persistent link: https://www.econbiz.de/10014287330

Bidimensional Vertical Differentiation

Garella, Paolo G.; Lambertini, Luca - 2012

In markets where product quality is important, more than one characteristic is usually necessary to de fine product quality. Standard models maintain that: (i) in a duopoly there will be a quality leader no matter whether the product can incorporate one or two vertical attributes; (ii)...

Persistent link: https://www.econbiz.de/10014171453

Ordered search in differentiated markets

Zhou, Jidong - 2009 - This Version: August 2009

This note presents an ordered search model in which consumers search both for price and product fitness. We construct … an equilibrium in which there is price dispersion and prices rise in the order of search. The top firms in consumer … search process, though charge lower prices, earn higher profits due to their larger market shares. …

Persistent link: https://www.econbiz.de/10011523970

Patent protection under endogenous product differentiation

Mukherjee, Arijit - School of Business and Economics, Loughborough University - 2013

It is generally believed that a weak patent protection makes the consumers and the society better off compared to a strong patent protection by increasing the intensity of competition if the weak patent protection does not affect innovation. We show that this conclusion may not hold if the...

Persistent link: https://www.econbiz.de/10010819893

Spatial Competition in a Differentiated Market with Asymmetric Costs

Selim, Tarek H. - 2020

Spatial quality choice is introduced, where consumers are horizontally differentiated by taste and firms vertically differentiated by quality location, within an equilibrium model of duopoly competition characterized by asymmetric fixed and variable costs. Firms choose quality location followed...

Persistent link: https://www.econbiz.de/10014033064