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Product Line Rivalry and Firm Asymmetry

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  • Zhihong Chen
  • Zhiqi Chen

Abstract

type="main"> We extend the Brander and Eaton (1984) model of product line rivalry to study the effects of asymmetry between firms on the equilibrium outcome. Our analysis shows that market interlacing can emerge as the equilibrium outcome even in situations where market segmentation would have been the only possible outcome had the firms been symmetric. We identify two strategic factors that lead to such an outcome.

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  • Zhihong Chen & Zhiqi Chen, 2014. "Product Line Rivalry and Firm Asymmetry," Journal of Industrial Economics, Wiley Blackwell, vol. 62(3), pages 417-435, September.
    • Handle: RePEc:bla:jindec:v:62:y:2014:i:3:p:417-435
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    References listed on IDEAS

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    Cited by:

    1. James A. Brander & Barbara J. Spencer, 2015. "Endogenous Horizontal Product Differentiation under Bertrand and Cournot Competition: Revisiting the Bertrand Paradox," NBER Working Papers 20966, National Bureau of Economic Research, Inc.
    2. Pavlov, Oscar & Weder, Mark, 2022. "Endogenous product scope: Market interlacing and aggregate business cycle dynamics," European Economic Review, Elsevier, vol. 148(C).

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