Arijit-Emran-Jerry-BEJTE-2020.pdf (451.6 kB)
Download fileProduct differentiation in a vertical structure
journal contribution
posted on 2021-01-25, 15:12 authored by Tien-Der HanTien-Der Han, M Emranul Haque, Arijit MukherjeeWe consider final goods producers’ preference for horizontal product differentiation in the presence of strategic input price determination. Final goods producers may not prefer maximal differentiation but may prefer moderate differentiation under both Cournot and Bertrand competition in the final goods market if product differentiation does not increase the market size significantly and there is either free entry in the input market or the input supplier has increasing returns to scale technology. Thus, we provide a new rationale for moderate product differentiation. Our reasons are different from the existing reasons of mixed pricing strategy, endogenous leadership, no-buy option for the consumers and the relative performance incentive schemes.
History
School
- Business and Economics
Department
- Economics
Published in
The B.E. Journal of Theoretical EconomicsVolume
22Issue
1Pages
105 - 122Publisher
Walter de Gruyter GmbHVersion
- VoR (Version of Record)
Rights holder
© Walter de GruyterPublisher statement
This paper was published in the journal The B.E. Journal of Theoretical Economics and is available at https://doi.org/10.1515/bejte-2020-0037.Acceptance date
2020-09-27Publication date
2020-11-13Copyright date
2022ISSN
2194-6124eISSN
1935-1704Publisher version
Language
- en