A note on quality choice with an extended Mussa and Rosen's model

Rim Lahmandi-Ayed

Economics Bulletin, 2007, vol. 12, issue 15, 1-9

Abstract: We suggest a model derived from the well-known Mussa and Rosen's model, in which two populations of consumers of opposite tastes co-exist: they rank in exactly the reverse order variants sold at the same price. This model may account for linked and contradictory characteristics in products (as for instance nutritional quality and taste), with consumers attaching more importance to one or to the other aspect. The subgame perfect equilibrium is fully characterized for a costless duopoly choosing qualities then prices.

Keywords: opposite; tastes. (search for similar items in EconPapers)
JEL-codes: L1 (search for similar items in EconPapers)
Date: 2007-07-02
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