Coordinating R&D, Product Positioning, and Pricing Strategy: A Duopoly Model

Xin (Shane) Wang (), Yuying Xie, Harsharanjeet S. Jagpal and Sengun Yeniyurt
Additional contact information
Xin (Shane) Wang: Ivey Business School, Western University
Yuying Xie: Shepherd University
Harsharanjeet S. Jagpal: Rutgers University
Sengun Yeniyurt: Rutgers University

Customer Needs and Solutions, 2016, vol. 3, issue 2, No 4, 104-114

Abstract: Abstract This paper develops an integrated duopoly model for coordinating R&D, product positioning, and pricing strategy. The model can be applied to a broad spectrum of market structures and market conditions since it allows for bidirectional technology transfers (i.e., firms can learn from each other), partial or complete technology transfer, differential quality-adjusted production costs across firms, preference heterogeneity across consumers for different product quality levels, and different behavioral modes of competitive reaction (e.g., sequential or simultaneous decision-making). We show that the managerial implications differ sharply for information goods and physical goods and vary depending on the behavioral modes chosen by the firms and on whether the technology transfers are unidirectional or bidirectional. Interestingly, contrary to common belief, for certain scenarios, product differentiation can increase when technology transfers are bidirectional.

Keywords: Product positioning; R&D; Technology spillover (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s40547-015-0063-y

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