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Multiproduct Quality Competition: Fighting Brands and Product Line Pruning

Обновлено: 09-12-2010

http://www.econ.ox.ac.uk/Research/WP/PaperDetails.asp?PaperID=137...

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Firms selling multiple quality-differentiated products frequently alter their product lines when a competitor enters the market. We present a model of multiproduct monopoly and duopoly using a general "upgrades" approach that yields a powerful analytical framework. We provide a simple theoretical explanation for the common strategies of using "fighting brands" and of product line "pruning". We also present a general condition that guarantees that a monopolist will forsake market segmentation opportunities and sell but a single product. A number of previously studied issues can be addressed by our model, including inter-temporal price discrimiation and "damaged goods".
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