How Do the Relative Superiority of a High-quality Good and Cost Inefficiency between Firms Affect Product Lines in Multiproduct Firms?
Tetsuya Shinkai () and
Ryoma Kitamura ()
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Ryoma Kitamura: Faculty of Economics, Otemon Gakuin University
No 230, Discussion Paper Series from School of Economics, Kwansei Gakuin University
We consider the product line strategies of duopolistic firms, each of which can supply two vertically differentiated products under nonnegative output constraints and expectations of their rival's product line reaction. Considering a game of firms with heterogeneous (homogeneous) unit costs for high- (low-) quality products, we derive the equilibria of the game and explore the effects of the relative superiority of the high-quality product and relative cost efficiency on the equilibrium outcomes and illustrate the result using the production substitution of differentiated goods within a firm and the high-quality good between firms.
Keywords: Multiproduct firm; Product line; Vertical product differentiation (search for similar items in EconPapers)
JEL-codes: D21 D43 L13 L15 (search for similar items in EconPapers)
Pages: 27 pages
New Economics Papers: this item is included in nep-bec, nep-ind, nep-mic and nep-ore
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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:230
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