On production costs in vertical differentiation models
In this paper, we analyse the effects of the introduction of a unit production cost beside a fixed cost of quality improvement in a duopoly model of vertical product differentiation. Thanks to an original methodology, we show that a low unit cost tends to reduce product differentiation and thus prices, whereas a high unit cost leads to widen product differentiation and to increase prices
|Date of creation:||2009|
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|Note:||View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00421171|
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