Advanced Search
MyIDEAS: Login to save this article or follow this journal

Competitive Positioning in Markets with Nonuniform Preferences

Contents:

Author Info

  • Asim Ansari

    (University of British Columbia)

  • Nicholas Economides

    (New York University)

  • Avijit Ghosh

    (New York University)

Abstract

We investigate the nature of competitive equilibrium for brands competing in a multi-attribute product space when consumer preferences for product attributes follow nonuniform distributions. We establish subgame-perfect equilibria in a two-stage game, where firms choose positions in the first stage and prices in the second stage. Two types of entry scenarios are investigated. In the first, the number of brands is given exogenously, and all of them choose positions simultaneously. In the second scenario, firms enter in sequence, and the early entrants can choose strategies to deter the entry of later entrants. We find the equilibria for two, three, and four brands for consumer preferences that follow a beta distribution. Nonuniform distributions result in equilibrium configurations that are substantially different from those obtained for uniform consumer distributions. In the two brands case, for sufficiently concentrated distributions we find asymmetric position equilibria with one firm at the corner of the market and one firm at an interior position. In the case of three brands, for sufficiently concentrated preferences we find symmetric equilibria that do not yield maximal differentiation. We also establish an equilibrium for the case of four competing brands. In addition we characterize entry deterring positioning strategies and examine how they vary with the distribution of consumer preferences.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://dx.doi.org/10.1287/mksc.13.3.248
Download Restriction: no

Bibliographic Info

Article provided by INFORMS in its journal Marketing Science.

Volume (Year): 13 (1994)
Issue (Month): 3 ()
Pages: 248-273

as in new window
Handle: RePEc:inm:ormksc:v:13:y:1994:i:3:p:248-273

Contact details of provider:
Postal: 7240 Parkway Drive, Suite 300, Hanover, MD 21076 USA
Phone: +1-443-757-3500
Fax: 443-757-3515
Email:
Web page: http://www.informs.org/
More information through EDIRC

Related research

Keywords: competitive strategy; product policy; game theory;

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Tselekounis, Markos & Maniadakis, Dimitris & Varoutas, Dimitris, 2012. "NGA investments: A departure from the existing cost and demand structure assumptions," 19th ITS Biennial Conference, Bangkok 2012: Moving Forward with Future Technologies - Opening a Platform for All 72490, International Telecommunications Society (ITS).
  2. Roger Betancourt & Margaret Malanoski, 1999. "An Estimable Model of Supermarket Behavior: Prices, Distribution Services and Some Effects of Competition," Empirica, Springer, vol. 26(1), pages 55-73, March.
  3. Ulrike Schuster & J?rgen W?ckl, 2005. "Optimal Defensive Strategies under Varying Consumer Distributional Patterns and Market Maturity," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, vol. 1(2), pages 187-206, July.
  4. Roger Betancourt & David Gautschi, 1996. "An international comparison of the determinants of retail gross margins," Empirica, Springer, vol. 23(2), pages 173-189, June.
  5. Nadarajah, Saralees & Kotz, Samuel, 2009. "Models for purchase frequency," European Journal of Operational Research, Elsevier, vol. 192(3), pages 1014-1026, February.
  6. Yong Liu & Daniel Putler & Charles Weinberg, 2006. "The welfare and equity implications of competition in television broadcasting: the role of viewer tastes," Journal of Cultural Economics, Springer, vol. 30(2), pages 127-140, September.
  7. Kieron J. Meagher & Klaus G. Zauner, 2008. "Uncertainty in Spatial Duopoly with Possibly Asymmetric Distributions: a State Space Approach," CEPR Discussion Papers 579, Centre for Economic Policy Research, Research School of Economics, Australian National University.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:inm:ormksc:v:13:y:1994:i:3:p:248-273. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.