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Product Differentiation with Multiple Qualities

Francesca Barigozzi and Ching-to Ma ()

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: We study subgame-perfect equilibria of the classical quality-price, multistage game of vertical product differentiation. Each firm can choose the levels of an arbitrary number of qualities. Consumers’ valuations are drawn from independent and general distributions. The unit cost of production is increasing and convex in qualities. We characterize equilibrium prices, and the equilibrium effects of qualities on the rival’s price in the general model. We present necessary and sufficient conditions for equilibrium differentiation in any of the qualities.

JEL-codes: D43 L13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-ind, nep-mic, nep-mkt and nep-sog
Date: 2016-09
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Related works:
Journal Article: Product differentiation with multiple qualities (2018) Downloads
Working Paper: Product Differentiation with Multiple Qualities (2017) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:wp1075

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