Multiproduct Quality Competition: Fighting Brands and Product Line Pruning

David Myatt, Justin P. Johnson, Johnson Graduate School of Management and Cornell University

No 105, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: Firms selling multiple quality-differentiated products frequently alter their product lines when a competitor enters the market. We present a model of multiproduct monopoly and duopoly using a general `upgrades` approach that yields a powerful analytical framework. We provide a simple theoretical explanation for the common strategies of using `fighting brands` and of product line `pruning`. We also present a general condition that guarantees that a monopolist will forsake market segmentation opportunities and sell but a single product. A number of previously studied issues can be addressed by our model, including inter-temporal price discrimiation and `damaged goods`.

Keywords: multiproduct quality competition; fighting brands; product line pruning; focus on quality; price discrimination (search for similar items in EconPapers)
JEL-codes: D42 D43 L11 L15 L63 (search for similar items in EconPapers)
Date: 2002-06-01
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Citations: View citations in EconPapers (3)

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Journal Article: Multiproduct Quality Competition: Fighting Brands and Product Line Pruning (2003)
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