Firms selling multiple quality-differentiated products frequently alter their product lines when a competitor enters the market. We present a model of multiproduct monopoly and duopoly using a general `upgrades` approach that yields a powerful analytical framework. We provide a simple theoretical explanation for the common strategies of using `fighting brands` and of product line `pruning`. We also present a general condition that guarantees that a monopolist will forsake market segmentation opportunities and sell but a single product. A number of previously studied issues can be addressed by our model, including inter-temporal price discrimiation and `damaged goods`.
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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number
105.
Find related papers by JEL classification: D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
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.:
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Justin P. Johnson Author-Email: jpj25@cornell.edu Author-Workplace-Name: Cornell University & David P. Myatt, 2006.
"Multiproduct Cournot Oligopoly,"
RAND Journal of Economics,
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