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Product Differentiation (product + differentiation)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	89%
4 Other Domains	11%

Distribution within Business, Economics, Finance and Accounting

General & Introductory Economics	53%
Agricultural Economics & Resource Management	14%
Econometrics	8%

Selected Abstracts

FIRM OWNERSHIP, PRODUCT DIFFERENTIATION AND WELFARE,

THE MANCHESTER SCHOOL, Issue 2 2007
YUANZHU LU
The purpose of this paper is to study the impact of firm ownership in a differentiated industry. We find there is no effect on product differentiation and welfare due to ownership ratio change between private and state so long as the private (state) ownership in a partially state-owned firm remains at least half (less than half). However, when the private (state) ownership in the partially state-owned firm falls below half (rises more than half), the degree of product differentiation increases (decreases) whereas welfare decreases (increases) in the share of private (state) ownership; and thus the extent of private or state ownership matters. [source]

MIXED OLIGOPOLY, PRODUCT DIFFERENTIATION AND COMPETITION FOR PUBLIC TRANSPORT SERVICES,

THE MANCHESTER SCHOOL, Issue 3 2006
PEDRO CANTOS-SÁNCHEZ
This paper explores frequency and pricing decisions in a horizontally and vertically differentiated duopoly when there is competition between means of transport and where one of the firms need not necessarily maximize profits. The private and the mixed duopoly are compared and distortions from the social optimum are identified, both analytically and numerically. A mixed duopoly does not recover the socially optimal solution. However, the presence of a (public) non-profit maximizing operator is a useful measure to get closer to the social optimum. When both operators are (private) profit maximizers, some control measures such as price caps and minimum service availability would reduce the distortions from the social optimum. [source]

Product Differentiation and Upstream-Downstream Relations

JOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 2 2001
Lynne Pepall
This paper examines the relationship between a differentiated downstream market and a specialized upstream market. We analyze three different types of vertical relation between the upstream and downstream sectors when the upstream market supplies specialized and complementary inputs to a downstream product-differentiated market. The first is the benchmark case of decentralized markets, the second is a network of alliances among upstream suppliers, and the third is partial vertical integration. We identify the perfect equilibrium for a symmetric model in each case and show that there is no simple relationship between the degree of connection between upstream and downstream firms and profitability. The key factor affecting prices and the relative profitability of the different market organizations is the degree of product differentiation among the downstream firms, because it affects the intensity of competition among upstream suppliers. We show that vertical foreclosure is not an equilibrium strategy. [source]

The Impact of Capacity Costs on Product Differentiation in Delivery Time, Delivery Reliability, and Price

PRODUCTION AND OPERATIONS MANAGEMENT, Issue 2 2006
Tamer Boyaci
We develop an analytical framework for studying the role capacity costs play in shaping the optimal differentiation strategy in terms of prices, delivery times, and delivery reliabilities of a profit-maximizing firm selling two variants (express and regular) of a product in a capacitated environment. We first investigate three special cases. The first is an existing model of price and delivery time differentiation with exogenous reliabilities, which we only review. The second focuses on time-based (i.e., length and reliability) differentiation with exogenous prices. The third deals with deciding on all features for an express variant when a regular product already exists in the marketplace. We subsequently address the integrative framework of time- and -price-based differentiation for both products in a numerical study. Our results shed light on the role that customer preferences towards delivery times, reliabilities and prices, and the capacity costs (absolute and relative) have on the firm's optimal product positioning policy. [source]

Measuring Market Power in the Ready-to-Eat Cereal Industry

ECONOMETRICA, Issue 2 2001
Aviv Nevo
The ready-to-eat cereal industry is characterized by high concentration, high price-cost margins, large advertising-to-sales ratios, and numerous introductions of new products. Previous researchers have concluded that the ready-to-eat cereal industry is a classic example of an industry with nearly collusive pricing behavior and intense nonprice competition. This paper empirically examines this conclusion. In particular, I estimate price-cost margins, but more importantly I am able empirically to separate these margins into three sources: (i) that which is due to product differentiation; (ii) that which is due to multi-product firm pricing; and (iii) that due to potential price collusion. The results suggest that given the demand for different brands of cereal, the first two effects explain most of the observed price-cost margins. I conclude that prices in the industry are consistent with noncollusive pricing behavior, despite the high price-cost margins. Leading firms are able to maintain a portfolio of differentiated products and influence the perceived product quality. It is these two factors that lead to high price-cost margins. [source]

A theory of quality-related differences in retail margins: why there is a ,premium' on premium gasoline

ECONOMIC INQUIRY, Issue 4 2000
JM Barron
This paper develops a theory of vertical and horizontal product differentiation to explain observed price-cost margin differentials for goods that differ in quality. The difference in price-cost margins between the high- and low-quality goods is shown to depend positively on consumers' average valuation for incremental increases in quality and positively on the distance to each competitor's closest rival. These predictions are largely supported using an extensive station-level data set of premium and regular unleaded gasoline prices from the Los Angeles Basin area from 1992,1995. [source]

European Food Marketing: Understanding Consumer Wants , The Starting Point in Adding Value to Basic Food Products La commercialisation des aliments en Europe : comprendre des désirs des consommateurs , point de départ pour ajouter de la valeur aux produits alimentaires de base Lebensmittelhandel in Europa: Das Verständnis der Kundenwünsche ist Voraussetzung für zusätzliche Wertschöpfung bei Grundnahrungsmitteln

EUROCHOICES, Issue 3 2009
David Hughes
Summary European Food Marketing: Understanding Consumer Wants , The Starting Point in Adding Value to Basic Food Products European consumers have been in sombre mood as they battle to make ends meet in an economic recession. Yet, for many countries, the past 50 years or so has been a halcyon period of economic growth and, in real terms, declining food prices. Apart from lower food prices, attributes of convenience, health, pleasure and more esoteric social elements such as animal welfare-friendliness and environmental sustainability are increasingly important to consumers in their food choices. With higher household incomes has come an increasingly segmented food market, as businesses seek to differentiate their products from competitors to earn a premium above the basic commodity price. In an increasingly competitive European and global market, whether the firm is small or large, the first step in successful product differentiation requires an insightful understanding of the drivers of consumer purchase and consumption behaviour. These have fundamental commercial importance in the marketing strategy of any business. Yet, a surprising number of businesses in the food and beverage industry know very little about who buys and consumes their products. In the 21st century, the primacy of consumers and citizens will be substantially more ,front and centre' than in the previous 50 years of production-driven agricultural and food policy. Les consommateurs européens font grise mine depuis qu'ils peinent à joindre les deux bouts dans un contexte de récession économique. Pourtant, dans de nombreux pays, les cinquante dernières années ont formé une période en or de croissance économique et de baisse des prix alimentaires en termes réels. Outre des prix plus bas, les consommateurs accordent, dans leurs choix alimentaires, une importance de plus en plus grande à des attributs en termes de commodité, de santé, de plaisir et d'éléments sociaux plus ésotériques comme le bon traitement des animaux et la durabilité environnementale. La hausse des revenus des ménages a entraîné une segmentation accrue des marchés des produits alimentaires car les entreprises cherchent à différencier leurs produits de ceux de leurs concurrents pour obtenir une prime en sus du prix du produit classique. Dans un marché européen et mondial de plus en plus concurrentiel, que l'entreprise soit petite ou grande, la première étape d'une différentiation de produit réussie consiste à bien comprendre les motivations des consommateurs en termes d'achat et leur comportement en terme de consommation. Ces considérations ont une importance commerciale primordiale dans la stratégie de commercialisation de toute entreprise. Pourtant, un nombre surprenant de firmes de l'industrie des aliments et boissons savent très peu de chose sur les clients qui achètent et consomment leurs produits. Au vingt-et-unième siècle, la primauté des consommateurs et des citoyens sera nettement plus ,,frontale et centrale" qu'elle ne l'était dans les cinquante dernières années durant lesquelles la politique agricole et alimentaire était axée sur la production. Gedrückte Stimmung hat sich unter den europäischen Verbrauchern breit gemacht, da sie in der Rezession über die Runden kommen müssen. Dabei konnten viele Länder in den vergangenen etwa 50 Jahren auf eine glückliche Zeit wirtschaftlichen Wachstums und real rückläufiger Lebensmittelpreise blicken. Einmal abgesehen von den geringeren Lebensmittelpreisen, richtet der Verbraucher sein Hauptaugenmerk bei der Auswahl seiner Lebensmittel zunehmend auf Kriterien wie Verbraucherfreundlichkeit, Gesundheit, Genuss sowie esoterischere soziale Elemente wie Tierschutzfreundlichkeit und Umweltverträglichkeit. Höhere Haushaltseinkommen führten zu einem immer stärker segmentierten Lebensmittelmarkt, da die Unternehmen danach streben, ihre Produkte von denen der Konkurrenz abzuheben, um einen Aufschlag auf den Grundwarenpreis zu erzielen. Ob es sich nun um ein kleines oder großes Unternehmen handelt: Auf einem zunehmend wettbewerbsorientierten europäischen Markt und Weltmarkt und auf dem Weg hin zu einer erfolgreichen Produktdifferenzierung ist es zunächst einmal erforderlich, die Triebfedern für die Kaufentscheidung und das Konsumverhalten des Verbrauchers zu verstehen. Diese spielen eine wichtige wirtschaftliche Rolle in der Marketingstrategie eines jeden Unternehmens. Dennoch wissen erstaunlich viele Unternehmen aus der Lebensmittel- und Getränkeindustrie nur sehr wenig darüber, wer ihre Produkte kauft und konsumiert. Im 21. Jahrhundert werden die Wünsche der Verbraucher und Bürger wesentlich stärker Vorrang haben als dies in den vergangenen 50 Jahren produktionsorientierter Agrar- und Lebensmittelpolitik der Fall war. [source]

Understanding pressures on fishery resources through trade statistics: a pilot study of four products in the Chinese dried seafood market

FISH AND FISHERIES, Issue 1 2004
Shelley Clarke
Abstract This study investigates the dried seafood trade, centred in Chinese markets, in order to better understand the pressures its demand exerts on global marine resource stocks. Using Hong Kong, the region's largest entrepôt, as a focal point, the trade in shark fins, abalone, bêche-de-mer and dried fish is characterized in terms of product history, volume, source fisheries and species composition. Trends identified in the Hong Kong market are interpreted in the context of the larger Chinese market. Shark fin imports grew 6% per year between 1991 and 2000, most likely because of market expansion in Mainland China, posing increasingly greater pressures on global shark resources. In contrast, the quantities of dried abalone traded through Hong Kong remained steady, but inferences based on this trend are discouraged by suggestions of increasing preferences for fresh product forms and growing domestic production in Mainland China. Hong Kong's imports of dried bêche-de-mer (sea cucumber) have decreased, while the percentage of imports re-exported has remained steady, suggesting that Hong Kong continues as an entrepôt for Mainland China despite declining domestic consumption. Few conclusions can be drawn regarding dried fish products, including whole fish and fish maws, because of a lack of product differentiation in customs data, but a market survey was conducted to provide information on species composition. Comparison of Hong Kong dried seafood trade statistics to those of other key trading partners indicates that, in general, Hong Kong's duty-free status appears to encourage more accurate reporting of traded quantities. Under-reporting biases ranged from 24 to 49% for shark fin and bêche-de-mer, respectively. Comparison to United Nations (UN) Food and Agriculture Organization (FAO) databases indicates additional under-reporting for shark fin such that an alternative minimum estimate of world trade is at least twice the FAO estimates in 1998,2000. The results of a survey of Hong Kong traders provide insight into their attitudes toward harvest, economic and regulatory factors, and suggest that conservation efforts are unlikely to emerge from, or be actively supported by, dried seafood trade organizations. The market's apparent sensitivity to economic sentiment, however, reveals an opportunity for consumer education to play a role in shaping future market growth and resource conservation. Recommendations are provided for improving trade statistics and for developing better analytical techniques to complement traditional methods for monitoring the exploitation and management of fisheries resources. [source]

Globalization's Alternatives: Competing or Complementary Perspectives?1

GOVERNMENT AND OPPOSITION, Issue 1 2008
John Glenn
Recent writings on globalization have tended to argue that such economic interconnectedness is, in one way or another, geographically delimited. Three competing views appear in the literature, regionalization, triadization and the involutionist perspective. This article challenges the portrayal of these perspectives as competing conceptions and instead argues that each perspective furnishes us with a partial view of a larger process. In so doing, this paper revisits the involutionist perspective, arguing that, in relation to the developing countries' relative share of world trade and investment shares, the use of the term ,globalization' should be questioned. Rather, in relation to trade, involution is a more apt description. However, in terms of FDI, stasis better describes the contemporary international economy. The article then examines the trade and investment patterns within the triad, corroborating earlier findings that each leg of the triad is increasingly trading more with their neighbours than with each other, but that inter-triad FDI is indeed increasing. Three main factors are presented in order to explain the contemporary patterns of trade and investment associated with involution, regionalization and triadization: product differentiation, vertical specialization and the continuing concentration on primary product production in much of the developing world. [source]

Price competition under universal service obligations

INTERNATIONAL JOURNAL OF ECONOMIC THEORY, Issue 3 2010
Axel Gautier
L13; L51 In industries like telecom, postal services or energy provision, universal service obligations (uniform price and universal coverage) are often imposed on one market participant. Universal service obligations are likely to alter firms' strategic behavior in such competitive markets. In the present paper, we show that, depending on the entrant's market coverage and the degree of product differentiation, the Nash equilibrium in prices involves either pure or mixed strategies. We show that the pure strategy market sharing equilibrium, as identified by Valletti, Hoernig, and Barros (2002), defines a lower bound on the level of equilibrium prices. [source]

Process and product innovation: A differential game approach to product life cycle

INTERNATIONAL JOURNAL OF ECONOMIC THEORY, Issue 2 2010
Luca Lambertini
C73; D43; D92; O31 We investigate the timing of adoption of product and process innovation using a differential game where firms may invest in both activities. We consider horizontal product innovation that reduces product substitutability, and process innovation that reduces marginal cost. First, we demonstrate that the incentive for cost-reducing investment is relatively higher than the incentive to increase product differentiation. Second, depending on initial conditions: (i) firms activate both types of investment from the very outset to the steady state; (ii) firms initially invest in only one R&D activity and then reach the steady state either carrying out only this activity or carrying out both; or (iii) firms do not invest at all in either type of innovation. Comparing R&D investments under Cournot and Bertrand behavior shows that quantity competition entails lower R&D incentives than price competition in both directions. [source]

A Positive Theory of Moral Management, Social Pressure, and Corporate Social Performance

JOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 1 2009
David P. Baron
This paper provides a theory of firm behavior motivated by moral duty, self-interest, and social pressure. A morally managed and a self-interested firm compete in a market in which their corporate social performance (CSP) provides product differentiation. Some citizens have altruistic or warm glow preferences for products with associated CSP, personal giving to social causes, holding shares in firms providing CSP, and contributing to social pressure to increase CSP. Social pressure is delivered by an activist NGO funded by voluntary contributions by citizens. The model characterizes an equilibrium in the product market, the capital market, and the market for social pressure. The equilibrium establishes a price for CSP and for activist-induced social pressure. The theory provides predictions of the market values of firms, the prices of products, firm profits, target selection, contributions to the activist, and the amount of CSP supplied. For example, if citizens do not distinguish between morally motivated CSP and CSP induced by social pressure, the activist is more likely to target the softer, morally motivated firm. Higher quality activists are better funded, target self-interested firms, and obtain greater corporate social performance. Lower quality activists target morally managed firms. [source]

Product Differentiation and Upstream-Downstream Relations

Price and Nonprice Competition with Endogenous Market Structure

JOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 1 2000
George Symeonidis
This paper examines the effect of the intensity of short-run price competition and other exogenous variables that affect gross profit margins,such as the degree of product differentiation and the consumers' responsiveness to quality,on market structure and on advertising and R&D expenditure. A key result is that more intense short-run competition can lead to lower concentration in industries with high advertising or R&D intensity, unlike exogenous-sunk-cost industries. Also, price competition has a negative effect on advertising or R&D expenditure. A case study is also presented, which is consistent with the theoretical results of the paper. [source]

Profitability differences between MNE subsidiaries and domestic firms: The case of the food industry in Greece

AGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 1 2004
George Anastassopoulos
This report analyzes determinants of profitability differences between subsidiaries of Multinational Enterprises (MNEs) and Domestic Enterprises (DMEs) in the Greek food industry using company level data. Previous studies have tested the hypothesis that ownership-specific advantages are a major determinant of performance differences. This study analyzes the processed food sector (SIC = 20), using a panel data set for 75 firms and 5 years. The model is evaluated using a random effects model. The results indicate that the determinants of profitability differ between MNEs subsidiaries and DMEs. MNEs' profitability depends on their market share, knowledge, and experience of the local market; training intensity; and product differentiation through the use of technological inputs from abroad and local advertising. DMEs' profitability depends on their market share and product differentiation, through local advertising and local R&D. Size has a negative effect on profitability for both groups of companies. Even after allowing for all of these determinants of profitability, ownership has an independent effect on profitability (namely higher for MNE subsidiaries than DMEs). [EconLit citations: F23, L66, L69]. © 2004 Wiley Periodicals, Inc. Agribusiness 20: 45,60, 2004. [source]

Vertical price leadership: A cointegration analysis

AGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 3 2002
W. Erno Kuiper
Here we detail a method to test whether or not retailers allow suppliers to set the wholesale price not only on the basis of the costs faced by the suppliers but also on the basis of consumer demand. Using standard theory, long-run price relationships between the stages in the channel are derived. Next, these static price relationships are imposed on a dynamic model to be tested for cointegration and long-run noncausality, embedding the hypotheses on vertical price leadership. To derive the testable implications of these hypotheses, we show that the common stochastic trend and long-run equilibrium error must explicitly be assigned to variables in the channel model. The model is particularly relevant for industries characterized by a low degree of product differentiation. An empirical application to two Dutch marketing channels for food products gives comprehensible results. [EconLit citations: C32, L12, Q11] © 2002 Wiley Periodicals, Inc. [source]

Seasonal protection of F&V imports in the EU: impacts of the entry price system

AGRICULTURAL ECONOMICS, Issue 2 2010
Jose-Maria Garcia-Alvarez-Coque
Entry price; Fruits and vegetables; Partial equilibrium; Trade policy Abstract The measures of border protection applied by the European Union (EU) to imports of fruits and vegetables (FV) are complex and usually not well represented in trade models, not only because of the range of instruments still constraining trade, but also because of product differentiation and seasonality in these products. This article assesses the impact of eliminating entry price (EP) constraints applied to a group of FV products. The proposed model is of a partial equilibrium nature and takes seasonality into account. We have applied the model to imports of tomatoes, cucumbers, clementines, and table grapes. Trade impacts of eliminating EP are significant for particular origins, during specific seasons, most notably for Moroccan tomatoes. The volumes and prices of products originating in the EU experience moderate reductions. [source]

A COMPARISON OF THE EFFECTIVENESS OF HEDONIC SCALES AND END-ANCHOR COMPRESSION EFFECTS

JOURNAL OF SENSORY STUDIES, Issue 2010
HARRY T. LAWLESS
ABSTRACT Three experiments were conducted to compare the relative performance of hedonic scaling methods, including the labeled affective magnitude (LAM) scale. In the first study, three versions of the LAM were used to evaluate 20 phrases that described diverse sensory experiences. One scale was anchored to "greatest imaginable like/dislike for any experience" and another used the "greatest imaginable like" phrase of the LAM but with the interior phrases repositioned relative to "any experience." The scale anchored to "any experience" showed a smaller range of scale usage and lower statistical differentiation, relative to the LAM scale, with the repositioned scale intermediate. Two further experiments compared the LAM to the nine-point hedonic scale, an 11-point category scale using the LAM phrases, and to a three-label line scale, a simplified version of the LAM with only the end phrases and the neutral center-point phrase. All scales showed similar differentiation of juices in the second study and sensory experience phrases in the third. A modest advantage for the LAM scale in the second experiment did not extend to the third study. Researchers should be careful in the choice of high end anchors for hedonic scales, as a compressed range of scale usage may result in lower product differentiation. PRACTICAL APPLICATIONS Hedonic scales for food acceptability are widely used in new product development for consumer testing and in food preference surveys. A desired goal of efficient sensory evaluation testing is the ability of tests to differentiate samples on the basis of scale data, in this case scales commonly used for food acceptability and preference testing. Scales which are able to differentiate products more effectively are less likely to lead to Type II error in experimentation, in which true differences between products are not detected. Such errors can lead to lost opportunities for product improvements or to enhanced chances for taking undetected risks in the case of false parity conclusions. [source]

Distribution conventionality in the movie sector: an econometric analysis of cinema supply

MANAGERIAL AND DECISION ECONOMICS, Issue 8 2009
Alan Collins
This paper empirically analyzes the impact of several factors on a ,conventionality index (CI)' in the specific context of the cinema exhibition sector. To our knowledge, it is the first time that a standard CI has been constructed for this purpose. Econometric analysis of the determinants of variation in this index provides decision-makers with an empirical focus for analyzing distributional aspects of the movie exhibition market, with particular emphasis on product differentiation. Specifically, (i) do cinemas based in a city area have a different or ,specialized' focus in contrast to cinemas in small towns? or (ii) do multiplexes have a different or more specialized focus in comparison with cinemas? To this end, cross-sectional econometric models are estimated to help analyze these effects in three Italian regions for a sample of cinemas covering the 2006 season. Copyright © 2009 John Wiley & Sons, Ltd. [source]

A MODEL OF MONOPOLISTIC COMPETITION WITH PERSONAL INCOME DISPERSION

METROECONOMICA, Issue 3 2005
Corrado Benassi
ABSTRACT We introduce non-homothetic preferences in the Dixit,Stiglitz model of monopolistic competition, and enquire about the effects of a change in income dispersion on the firms' optimal decisions and market equilibrium. Income dispersion, modeled as a mean preserving spread, is shown to affect only the degree of product differentiation under the standard negligibility hypothesis on the firms' decision making process, while it generates a positive co-movement of demand and demand elasticity, when this assumption is removed and the price index effect is taken into account. [source]

HETEROGENEOUS SPACE IN REGIONAL ECONOMICS AND BEYOND

PACIFIC ECONOMIC REVIEW, Issue 4 2006
John G. Greenhut
Such space clearly applies to a regional economy where costly distance provides opportunities for sellers to discriminate in price among customers. Similar discriminatory opportunities may be created in a spaceless world through, for example, product differentiation and the passage of time. It is in this broad perspective that a generalized theory of discriminatory spatial pricing is formulated. Simulations reveal a remarkable panoply of cost, price, and output relationships, highlighting the criticality of variations in elasticity in determining macro, micro, and regional economic behaviour. [source]

Using emotional benefits as a differentiation strategy in saturated markets

PSYCHOLOGY & MARKETING, Issue 11 2009
Ramo Barrena
The high level of product substitution in most consumer markets often makes it difficult to match supply with demand, especially in sectors with mature, saturated markets with intense competition and a high degree of product differentiation. The difficulty of using technical characteristics such as quality and/or price to differentiate products suggests that marketers could profit from gaining more insight into the way in which consumers' purchase decisions are influenced by their perceived emotions. This paper investigates this issue in the wine market, a highly saturated market with homogeneous supply, obtaining results that appear to support the notion that emotions do indeed play a part in consumer choice structures, which show a higher degree of abstraction in those segments that report a greater number of perceived emotions. This considerably complicates the task of creating a differentiated marketing strategy, in the sense that suppliers need to give much greater consideration to consumers' self-awareness. © 2009 Wiley Periodicals, Inc. [source]

The Pattern and Determinants of Intra-Industry Trade in Australian Manufacturing

THE AUSTRALIAN ECONOMIC REVIEW, Issue 3 2000
Kishor Sharma
This paper presents the pattern and determinants of intra-industry trade (IIT) in Australian manufacturing since the late 1970s. The results point to a sharp rise in IIT from the mid 1980s which appears to be linked with an outward-oriented policy. Industry-level analysis indicates that industries which experienced a sharp fall in protection are the industries with the higher levels of IIT. These include textiles, garments, rubber products, and machinery and equipment. An increasing trend in IIT suggests that the short-term adjustment costs associated with trade liberalisation are likely to be lower, and that liberalisation can proceed without huge short-term adjustment costs. Using a logit model the determinants of IIT are investigated. Results indicate that IIT is positively related to product differentiation and scale economies, and negatively related to the levels of protection and foreign ownership in the pre-liberalisation period. In the post-liberalisation period, however, scale economies explain the inter-industry variations in IIT. R&D intensity and close economic integration appear to have no impact on IIT regardless of the nature of the policy regime. [source]

The Premium,Dividend Competition in the Prewar Japanese Life Insurance Industry: A Game-Theoretic Interpretation

THE JAPANESE ECONOMIC REVIEW, Issue 4 2000
Yoshiro Tsutsui
Between 1917 and 1935, Japanese life insurance companies competed with each other on a premium,dividend basis. We propose that such competition took the form of product differentiation, exploiting differences in discount rates or price expectations among policy-holders. Our model shows that under some conditions the introduction of such competition can be beneficial to the competitive companies. It is shown that these conditions were satisfied at that time, and that more detailed factors are also consistent with the model. JEL Classification Numbers: C72, D43, G22, N25. [source]

The Adverstising Market in a Product Oligopoly

THE JOURNAL OF INDUSTRIAL ECONOMICS, Issue 3 2004
Anthony Dukes
A model is developed in which producers in a differentiated product market compete in prices and informative advertising. The model also includes commercial media, which are linked to producers through the advertising market and to consumers through the media market. We investigate how certain market parameters, such as media market differentiation or product market differentiation, affect the competitive level advertising chosen in the market. The model shows that less product differentiation or more media differentiation leads to a higher market level of advertising. In the case of sufficiently high media differentiation, levels of advertising are in excess of the social optimum. [source]

Company Competencies as a Network: The Role of Product Development

THE JOURNAL OF PRODUCT INNOVATION MANAGEMENT, Issue 3 2000
Hanne Harmsen
Product development managers and academics like to assure themselves and each other that new product development is one of the most critical areas of company competence and contributes positively to company success. But does top management agree? Because if they do not, the consequences will heavily influence the resource allocation to product development and career possibilities of new product developments manager. This study examines how top managers view the importance of product development relative to other central competence areas. Although asking managers about their perception is one way of evaluating the importance, its contribution to company success is another important measure. In this study, the impact of product development, relative to other important competence areas, is measured to assess further how critical product development is for overall company success. The authors investigate these matters in a survey of top managers in 513 Danish production companies. Ten areas important for achieving company objectives are identified. These are product development, market intelligence, production management, strategy and vision, sales, market responsiveness, promotion, internal co-operation, image, and supply management. Product development is rated a fairly important competence as it ranks number four, with sales, market responsiveness, and production management ranking numbers one to three. Yet a distressing negative impact on overall company success is found for product development proficiency, whereas success is positively related to production management, image, and differentiation of products. Further analysis reveals that product development contributes positively to success by enabling product differentiation and enhancing promotion proficiency. Influenced by and influencing many other competencies, product development is found to be a central competence. Results support a nonfunctional and broad perspective of how bundles of competences interact and impact on success and establish a positive overall contribution to product development. [source]

THE SURVIVAL OF DIFFERENTIATED PRODUCTS: AN APPLICATION TO THE UK AUTOMOBILE MARKET, 1971,2002*

THE MANCHESTER SCHOOL, Issue 3 2009
FRANCISCO REQUENA-SILVENTE
We investigate how competition affected the survival of products in the UK automobile market between 1971 and 2002. We find, after using a host of controls to account for product characteristics and changes in market structure, that (i) within and between firm spatial competition significantly reduces the life of a model, (ii) initial product differentiation and variant proliferation obviate competition, and (iii) product innovation significantly extends model survival. [source]

FIRM OWNERSHIP, PRODUCT DIFFERENTIATION AND WELFARE,

SEQUENTIAL MERGERS WITH DIFFERING DIFFERENTIATION LEVELS,

AUSTRALIAN ECONOMIC PAPERS, Issue 3 2009
TAKESHI EBINA
We study sequential merger incentives under presence of product differentiation. Two sets of firms produce closely related goods, whereas each set produces more differentiated goods. Merger incentives under product differentiation are found to be stronger for two firms producing closely related goods than more differentiated goods. Also, after one merger, other firms are willing to follow with their own merger, resulting in sequential mergers. This result is consistent with the recent mergers in the video game software industry in Japan. [source]

HOTELLING'S BEACH WITH LINEAR AND QUADRATIC TRANSPORTATION COSTS: EXISTENCE OF PURE STRATEGY EQUILIBRIA,

AUSTRALIAN ECONOMIC PAPERS, Issue 1 2007
ALAIN EGLI
In Hotelling type models consumers have the same transportation cost function. We deviate from this assumption and introduce two consumer types. Some consumers have linear transportation costs, while the others have quadratic transportation costs. If at most half the consumers have linear transportation costs, a subgame perfect equilibrium in pure strategies exists for all symmetric locations. Furthermore, no general principle of differentiation holds. With two consumer types, the equilibrium pattern ranges from maximum to intermediate differentiation. The degree of product differentiation depends on the fraction of consumer types. [source]