Oligopolistic Competition and Consumer Benchmarking in a Rivalrous Consonance Market Structure: Measurable Characteristics

Robert E. Kuenne
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Robert E. Kuenne: Princeton University

Chapter 9 in Price and Nonprice Rivalry in Oligopoly, 1998, pp 220-265 from Palgrave Macmillan

Abstract: Abstract Chapter 8 dealt with optimization models for price and core quality characteristics of an isolated firm when those core characteristics were the extent and consistency of product durability and the length of warranty period, and were for products which do not age or wear out with time and those that do. This chapter extends this decision making into a duopolistic model of strategic interdependence under the regime of rivalrous consonance described and illustrated in Chapter 3. As in Chapter 8, firms’ decisions involve ρi, μi, σi and wi, or price, mean time to failure (MTTF) the standard deviation of the MTTF density function, and length of warranty period. In the interest of focussing on the implications of duopolistic rivalry, the models in this chapter will deal only with the case of products that suffer wear and tear with age, so that the probability of failure rises with the age of the product.

Keywords: Nash Equilibrium; Quality Characteristic; Demand Function; Quality Variable; Modeling Methodology (search for similar items in EconPapers)
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-50371-7_9

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DOI: 10.1007/978-0-230-50371-7_9

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