Strategic Choice of Quality When Quality is Costly: The Persistence of the High-Quality Advantage
AbstractIn a two-firm, two-stage model of vertical product differentiation, I show that for every convex fixed-cost function of quality, the firm that chooses the higher quality at the first stage earns the higher profits. The result holds for the pure-strategy equilibrium in the simultaneous-quality game, and it holds as well if firms choose their qualities in sequential order.
Download InfoIf 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.
Bibliographic InfoArticle provided by The RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 28 (1997)
Issue (Month): 2 (Summer)
Contact details of provider:
Web page: http://www.rje.org
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral 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: ().
If references are entirely missing, you can add them using this form.