On Firms' Preferences for Product Differentiation

Rajeev Tyagi ()
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Rajeev Tyagi: University of California, Irvine

Economics Bulletin, 2005, vol. 12, issue 17, 1-8

Abstract: We examine firms' preferences for product differentiation when a firm has a demand-side and/or a cost-side advantage over its competitor. We show that if the magnitude of these advantages is small, then both firms prefer more differentiated products. However, if the magnitude of demand-side (cost-side) advantage is larger, then only the advantaged (disadvantaged) firm prefers more differentiated products.

Keywords: Competition (search for similar items in EconPapers)
JEL-codes: D4 L1 (search for similar items in EconPapers)
Date: 2005-10-06
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