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Model Exit in a Vertically Differentiated Market: Interfirm Competition versus Intrafirm Cannibalization in the Computer Hard Disk Drive Industry

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Author Info
Christopher Ruebeck ()

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Abstract

What characteristics of a product’s local market make its withdrawal more likely? This study investigates the importance of intrafirm “cannibalization” of a product’s demand by products manufactured by the same firm versus interfirm competition from others’ products. While both forces impact product withdrawal, cannibalization has a more robust and significant effect. Hedonic price regressions also reveal higher discounting of older models’ quality-adjusted prices, strengthening the argument for caution when treating list prices as proxies for transaction prices. Copyright Springer 2004

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File URL: http://hdl.handle.net/10.1007/s11151-004-6576-4
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Publisher Info
Article provided by Springer in its journal Review of Industrial Organization.

Volume (Year): 26 (2004)
Issue (Month): 1 (November)
Pages: 27-59
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:kap:revind:v:26:y:2004:i:1:p:27-59

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Web page: http://www.springerlink.com/link.asp?id=100336

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords: differentiated products; exit; hedonic price index; transaction prices; variable hazard rate; withdrawal;

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Christopher F Baum, 1999. "PROBEXOG-TOBEXOG: Stata modules to test exogeneity in probit/tobit," Statistical Software Components S401102, Boston College Department of Economics, revised 19 May 2007. [Downloadable!]
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This page was last updated on 2009-12-22.

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