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Uncertainty quality, product variety and price competition

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Author Info
GABSZEWICZ, Jean J. (UniversitŽ catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))
RESENDE, Joana

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Abstract

This paper analyses price competition under product differentiation when goods are defined in a two dimensional characteristic space, and consumers do not know which firm sells which quality. Equilibrium prices consist of two additive terms, which balance consumers' relative valuation of goods' expected quality and consumers' preferences for variety. However the relative importance of these terms differ under vertical and horizontal dominance.

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File URL: http://www.uclouvain.be/cps/ucl/doc/core/documents/coredp2008_36.pdf
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Publisher Info
Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2008036.

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Date of creation: 01 Jun 2008
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Handle: RePEc:cor:louvco:2008036

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Related research
Keywords: product differentiation; variety; quality; uncertainty;

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Find related papers by JEL classification:
D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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This page was last updated on 2009-11-19.

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