Download or read book Price directed Search Product Differentiation and Competition written by Martin Obradovits and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Especially in many online markets, consumers can readily observe prices, but may need to further inspect products to assess their suitability. We study the effects of product differentiation and search costs on competition and market outcomes in a tractable model of price-directed consumer search. We find that (i) firms' equilibrium pricing always induces efficient search behavior, (ii) for relatively large product differentiation, welfare distortions still occur because some consumers (may) forgo consumption, and (iii) lower search costs lead to stochastically higher prices, increasing firms' expected profits and decreasing their frequency of sales. Consumer surplus often falls when search costs decrease.

Download or read book The Economic Theory of Product Differentiation written by John Beath and published by Cambridge University Press. This book was released on 1991-02-22 with total page 220 pages. Available in PDF, EPUB and Kindle. Book excerpt: There are few industries in modern market economies that do not manufacture differentiated products. This book provides a systematic explanation and analysis of the widespread prevalence of this important category of products. The authors concentrate on models in which product selection is endogenous. In the first four chapters they consider models that try to predict the level of product differentiation that would emerge in situations of market equilibrium. These market equilibria with differentiated products are characterised and then compared with social welfare optima. Particular attention is paid to the distinction between horizontal and vertical differentiation as well as to the related issues of product quality and durability. This book brings together the most important theoretical contributions to these topics in a succinct and coherent manner. One of its major strengths is the way in which it carefully sets out the basic intuition behind the formal results. It will be useful to advanced undergraduate and graduate students taking courses in industrial economics and microeconomic theory.

Download or read book Product Differentiation and Price Competition Between a Safe and a Risky Seller written by Winand Emons and published by . This book was released on 1998 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Product Differentiation and Non price Competition written by Norman J. Ireland and published by Wiley-Blackwell. This book was released on 1987-01-01 with total page 192 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Price and Quality written by Jonas Häckner and published by . This book was released on 1993 with total page 126 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Product Differentiation and Equilibrium Price with Partial Product Search written by Lin Liu and published by . This book was released on 2021 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Prices Product Differentiation and Heterogeneous Search Costs written by José Luis Moraga-González and published by . This book was released on 2014 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Discrete Choice Theory of Product Differentiation written by Simon P. Anderson and published by MIT Press. This book was released on 1992 with total page 454 pages. Available in PDF, EPUB and Kindle. Book excerpt: "The discrete choice approach provides an ideal framework for describing the demands for differentiated products and can be used for studying most product differentiation models in the literature. By introducing extra dimensions of product heterogeneity, the framework also provides richer models of firm location and product selection."--BOOK JACKET.

Download or read book Pricing Product Diversity and Search Costs written by Simon P. Anderson and published by . This book was released on 2000 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study price competition in the presence of search costs and product differentiation. The limit cases of the model are the "Bertrand Paradox," the "Diamond Paradox," and Chamberlinian monopolistic competition. Market prices rise with search costs and decrease with the number of firms. Prices may initially fall with the degree of product differentiation because more diversity leads to more search and more competition. Equilibrium diversity rises with search costs, while the optimum level falls, so entry is excessive. The market failure is most pronounced for low preference for variety and high search costs.

Download or read book Price directed Search and Collusion written by Martin Obradovits and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In many (online) markets, consumers can readily observe prices, but need to examine individual products at positive cost in order to assess how well they match their needs. We propose a tractable model of price-directed sequential search in a market where firms compete in prices. Each product meets consumers' basic needs, however they are only fully satisfied with a certain probability. In our setup, four types of pricing equilibria emerge, some of which entail inefficiencies as not all consumers are (always) served. We then lend our model to analyze collusion. We find that for any number of firms, there exists a parameter region in which the payoff-dominant symmetric collusive equilibrium gives rise to a higher expected total social welfare than the repeated one-shot Nash equilibrium. In other regions, welfare is identical under collusion and merely consumer rents are transferred, or both welfare and consumer rents are reduced. An all-inclusive cartel maximizing industry profit increases welfare for an even larger set of parameters, but may also be detrimental to it.

Download or read book Dynamic Price Competition with Price Adjustments Costs and Product Differentiation written by Gianluigi Vernasca and published by . This book was released on 2003 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Economics of Product Differentiation written by Jacques François Thisse and published by . This book was released on 1994 with total page 408 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Dynamic price competition with price adjustment costs and product differentiation written by Gianluigi Vernasca and published by . This book was released on 2003 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Price Competition Information Acquisition and Product Differentiation Perception written by Gary Biglaiser and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We consider the equilibrium interplay between sellers' price competition and consumers' perception of product differentiation. We analyze a situation where, before trading, consumers acquire information at a cost about their preferences between sellers' differentiated products. The incentive for information acquisition depends on the average value of products, the objective product differentiation, and their beliefs about sellers' prices. The acquired information shapes consumers' perceived product differentiation and sellers' equilibrium prices. We characterize the unique symmetric equilibrium and study comparative statics with respect to consumer information acquisition cost and sensitivity to product differentiation. We then apply our model to platform design.

Download or read book Price Competition in Product Variety Networks written by Philip Ushchev and published by . This book was released on 2015 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: We develop a product-differentiated model where the product space is a network defined as a set of varieties (nodes) linked by their degree of substituabilities (edges). In this network, we also locate consumers so that the location of each consumer (node) corresponds to her "ideal" variety. We show that there exists a unique Nash equilibrium in the price game among firms. Equilibrium prices are determined by firms' weighted Bonacich centralities and the average willingness to pay across consumers. They both hinge on the network structure of the firm-product space. We also investigate how local product differentiation and the spatial discount factor affect the equilibrium prices. We show that these effects non-trivially depend on the network structure. In particular, we find that, in a star-shaped network, the firm located in the star node does not always enjoy higher monopoly power than the peripheral firms

Download or read book Product Differentiation and Operations Strategy for Price and Time Sensitive Markets written by Sachin Jayaswal and published by . This book was released on 2009 with total page 155 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this dissertation, we study the interplay between a firm's operations strategy, with regard to its capacity management, and its marketing decision of product differentiation. For this, we study a market comprising heterogeneous customers who differ in their preferences for time and price. Time sensitive customers are willing to pay a price premium for a shorter delivery time, while price sensitive customers are willing to accept a longer delivery time in return for a lower price. Firms exploit this heterogeneity in customers' preferences, and offer a menu of products/services that differ only in their guaranteed delivery times and prices. From demand perspective, when customers are allowed to self-select according to their preferences, different products act as substitutes, affecting each other's demand. Customized product for each segment, on the other hand, results in independent demand for each product. On the supply side, a firm may either share the same processing capacity to serve the two market segments, or may dicate capacity for each segment. Our objective is to understand the interaction between product substitution and the firm's operations strategy (dedicated versus shared capacity), and how they shape the optimal product differentiation strategy. To address the above issue, we first study this problem for a single monopolist firm, which offers two versions of the same basic product: (i) regular product at a lower price but with a longer delivery time, and (ii) express product at a higher price but with a shorter delivery time. Demand for each product arrives according to a Poisson process with a rate that depends both on its price and delivery time. In addition, if the products are substitutable, each product's demand is also influenced by the price and delivery time of the other product. Demands within each category are served on a first-come-first-serve basis. However, customers for express product are always given priority over the other category when they are served using shared resources. There is a standard delivery time for the regular product, and the firm's objective is to appropriately price the two products and select the express delivery time so as to maximize its profit rate. The firm simultaneously needs to decide its installed processing capacity so as to meet its promised delivery times with a high degree of reliability. While the problem in a dedicated capacity setting is solved analytically, the same becomes very challenging in a shared capacity setting, especially in the absence of an analytical characterization of the delivery time distribution of regular customers in a priority queue. We develop a solution algorithm, using matrix geometric method in a cutting plane framework, to solve the problem numerically in a shared capacity setting. Our study shows that in a highly capacitated system, if the firm decides to move from a dedicated to a shared capacity setting, it will need to offer more differentiated products, whether the products are substitutable or not. In contrast, when customers are allowed to self-select, such that independent products become substitutable, a more homogeneous pricing scheme results. However, the effect of substitution on optimal delivery time differentiation depends on the firm's capacity strategy and cost, as well as market characteristics. The optimal response to any change in capacity cost also depends on the firm's operations strategy. In a dedicated capacity scenario, the optimal response to an increase in capacity cost is always to offer more homogeneous prices and delivery times. In a shared capacity setting, it is again optimal to quote more homogeneous delivery times, but increase or decrease the price differentiation depending on whether the status-quo capacity cost is high or low, respectively. We demonstrate that the above results are corroborated by real-life practices, and provide a number of managerial implications in terms of dealing with issues like volatile fuel prices. We further extend our study to a competitive setting with two firms, each of which may either share its processing capacities for the two products, or may dedicate capacity for each product. The demand faced by each firm for a given product now also depends on the price and delivery time quoted for the same product by the other firm. We observe that the qualitative results of a monopolistic setting also extend to a competitive setting. Specifically, in a highly capacitated system, the equilibrium prices and delivery times are such that they result in more differentiated products when both the firms use shared capacities as compared to the scenario when both the firms use dedicated capacities. When the competing firms are asymmetric, they exploit their distinctive characteristics to differentiate their products. Further, the effects of these asymmetries also depend on the capacity strategy used by the competing firms. Our numerical results suggest that the firm with expensive capacity always offers more homogeneous delivery times. However, its decision on how to differentiate its prices depends on the capacity setting of the two firms as well as the actual level of their capacity costs. On the other hand, the firm with a larger market base always offers more differentiated prices as well as delivery times, irrespective of the capacity setting of the competing firms.

Download or read book Product Differentiation in a Market with Endogenous Sequential Entry written by Walter James Lane and published by . This book was released on 1978 with total page 410 pages. Available in PDF, EPUB and Kindle. Book excerpt: