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Exploring Stackelberg profit ordering under asymmetric product differentiation

  • Banerjee, Dyuti S.
  • Chatterjee, Ishita
Registered author(s):

    The literature on differentiated products only considers symmetric cross-price effects and shows that the profit ordering of firms in a sequential set-up is uni-directional. This paper shows that uni-directional profit ordering breaks down under asymmetric product differentiation. Above a unique cross-price effect level the follower's profit exceeds that of the leader. The reverse is true below this level. This result holds for both substitutes and complements.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0264999313004252
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    Article provided by Elsevier in its journal Economic Modelling.

    Volume (Year): 36 (2014)
    Issue (Month): C ()
    Pages: 309-315

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    Handle: RePEc:eee:ecmode:v:36:y:2014:i:c:p:309-315
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30411

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