The Paternity of the Price-Quality "Value Map"
AbstractIn the literature on firm strategy and product differentiation, consumer price-quality trade-offs are sometimes represented using consumer “value maps”. These involve the geometric representation of indifferent price and quality combinations as points along curves that are concave to the “quality” axis. In this paper, it is shown that the value map for price-quality tradeoffs may be derived from a Hicksian compensated demand curve for product quality. The paper provides the theoretical link between analytical methods employed in the existing literature on firm strategy and competitive advantage with the broader body of economic analysis.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 14740.
Date of creation: 2003
Date of revision:
Value map; competitive advantage; quality; price; strategy;
Other versions of this item:
- D46 - Microeconomics - - Market Structure and Pricing - - - Value Theory
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
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- Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132.
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