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Competitive Product Positioning and Pricing under Brand Loyalty

Rickard Enström and Subhadip Ghosh ()

Indian Economic Review, 2016, vol. 51, issue 1, 69-81

Abstract: We analyze the pure strategy equilibrium in prices and the corresponding equilibrium product differentiation in a two-stage linear spatial competition duopoly model with quadratic transportation costs. Both firms have segments of brand loyal and non-brand loyal consumer segments, with the two firms primarily competing on the brand switching segment. A comparative statics analysis is undertaken, looking at the impact of a change in size, presence, and asymmetry of the brand loyal segments.

Keywords: Product Differentiation; Spatial Competition; Brand Loyalty; Pricing (search for similar items in EconPapers)
JEL-codes: D40 R32 (search for similar items in EconPapers)
Date: 2016
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