The recent literature argues that offering consumer returns, such as money-back guarantees (MBGs), reduces quality differentiation in competitive markets. We show that this argument does not hold in general. We propose a new certainty-equivalent approach, which shows that offering product...

We consider two firms selling products to a market of network-connected customers. Each firm is selling one product and the two products are substitutable. The customers make purchases based on the multinomial logit model and the firms compete for their purchasing probabilities. We characterize...

Established findings suggest that strategic inventory may alleviate double marginalization and improve the efficiency of a decentralized distribution channel. In this paper, we examine the effect of strategic inventory in the presence of chain-to-chain competition. We show that as the...

We study pricing strategies of competing firms that sell heterogeneous products to consumers in a social network. Goods are substitutes and there are network externalities between neighboring consumers. We show that there exists a unique subgame-perfect equilibrium where, in the first stage,...