Product Differentiation and Profitability: An Asymmetric Model
AbstractThe purpose of this paper is to develop a model of product differentiation in which there is an asymmetry, namely that some customers are easier to serve than others. It turns out that profits are negatively related to difficulty of service, and that profits and market share are negatively related. The results of this model are used to shed light on some aspects of the collusion versus differential efficiency debate, and are also compared with vertical product differentiation models. Copyright 1990 by Blackwell Publishing Ltd.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Journal of Industrial Economics.
Volume (Year): 39 (1990)
Issue (Month): 2 (December)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821
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- Shy, Oz & Stenbacka, Rune, 2006. "Service hours with asymmetric distributions of ideal service time," International Journal of Industrial Organization, Elsevier, vol. 24(4), pages 763-771, July.
- Marco Alderighi & Claudio A. Piga, 2008.
"The Circular City with Heterogeneous Firms,"
Discussion Paper Series
2008_03, Department of Economics, Loughborough University, revised Jul 2008.
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