In this paper we provide a theoretical foundation for the Porter hypothesis in a context of quality competition. We use a duopoly model of vertical product differentiation where firms simultaneously choose the environmental quality of the good they produce (which can be either high or low) and,...

In this work we emphasize why market coverage should be considered endogenous for a correct analysis of entry deterrence in vertical differentiation models and discuss the implications of this endogeneity for that analysis. We consider contexts without quality costs and also contexts with convex...

We analyze a vertically differentiated market, assuming that <italic>conventional</italic> and <italic>green</italic> firms' products have different impacts on the environment. Heterogeneous consumers choose to be supplied by a conventional or a green firm, depending on their extra willingness to pay for a green product and the...

This paper presents a model of collusion in vertically differentiated industries where firms have the option to make their products distinguishable to consumers by attaching a brand. We show that if consumers’ preferences are linear in the quality dimension and their beliefs satisfy a standard...

This paper studies the effect of a minimum quality standard, a compulsory labeling scheme, and the combination of both instruments in a vertical differentiation model when not all quality dimensions of products can be observed byconsumers. Both a minimum quality standard on the non-observable...

We study mass customization in a duopoly game in which the firms' products have different qualities. Whether customization choices are made simultaneously or sequentially is endogenously determined. Specifically, the customization stage of the game involves two periods. Each firm either selects...

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

This study applies the vertical differentiation model to issues of channel choice. The primary goal is to examine how channel structures may influence a firm's strategies and consumer welfare. Because our concerns are more about coordination rather than competition, the effects of strategic...

We develop a model that is a synthesis of the two-sided markets duopoly model of Armstrong (2006) with the nested vertical and horizontal dierentiation model of Gabszewicz and Wauthy (2012), which consists of a linear city with dierent consumer densities on the left and on the right side of the...

We investigate the impact of alternative certifying institutions on firms’ incentives to engage in costly Corporate Social Responsibility (CSR) activities as well as their relative market and societal implications. We find that the CSR certification standard is the lowest under for-profit...