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Differentiated Market (differentiated + market)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	100%

Selected Abstracts

Consumer Stockpiling and Price Competition in Differentiated Markets

JOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 4 2007
Liang Guo
In many storable-goods markets, firms are often aware that consumers may strategically adjust purchase timing in response to expected price dynamics. For example, in periods when prices are low, consumers stockpile for future consumption. This paper investigates the dynamic impact of consumer stockpiling on competing firms' strategic pricing decisions in differentiated markets. The necessity of equilibrium consumer storage for storable products is re-examined. It is shown that preference heterogeneity generates differential consumer stockpiling propensity, thereby intensifying future price competition. As a result, consumer storage may not necessarily arise as an equilibrium outcome. Economic forces are also investigated that may mitigate the competition-intensifying effect of consumer inventories and that, hence, may lead to equilibrium consumer storage. [source]

Time-to-market in vertically differentiated industries

INTERNATIONAL JOURNAL OF ECONOMIC THEORY, Issue 4 2007
Emanuele Bacchiega
L11; L12; L13 This paper analyzes the optimal time to introduce a new product in a vertical differentiated market when the delay between innovation and market opening can be shortened through investments whose costs increase, the shorter the desired delay. The timing process is affected by the trade-off between being first and getting monopoly profits, and postponing entry for reducing time-to-market costs. We study the balance of these forces and how this balance is influenced by market structure. In our model, it is possible a priori to observe at the optimal solution both a quality-upgrading equilibrium (first entering the market with the low quality good and then marketing the high quality variant) and quality-downgrading equilibrium (first entering the market with the high quality good and then marketing the low quality variant) while in the existing published literature a quality-upgrading equilibrium is always observed. [source]

Multiproduct firm behaviour in a differentiated market

CANADIAN JOURNAL OF ECONOMICS, Issue 1 2003
Eric Giraud-Héraud
We prove existence and explicitly characterize equilibrium when transportation costs are quadratic. We exhibit interesting equilibrium features for price policy, market shares, and profits. In equilibrium, the multiproduct firm uses its connected market shares to build asymmetric pricing schemes that allow a fraction of its product line (brands, stores or firms) to be shielded from outside competition and hence extracts maximum consumer surplus. Our results shed some light on the link between product differentiation and mergers and acquisitions activity (M&As). JEL Classification: D21, L11, L13 Le comportement de l'entreprise multi-produits dans un marché différencié Cet article propose une généralisation du modèle circulaire de différenciation des produits en considérant le cas d'une firme multi-produits en concurrence avec des firmes mono-produit. Nous montrons l'existence d'un équilibre en prix, que nous caractérisons dans le cas de coûts de transports quadratiques. Nous exposons les propriétés de cet équilibre en terme de parts de marchés et de profits obtenus par les entreprises. A l'équilibre, la firme multi-produits utilise ses niches de marché pour mettre en place une tarification asymétrique permettant à une partie de sa ligne de produits d'être protégée de la concurrence et d'extraire le maximum de surplus aux consommateurs. Nous proposons ensuite une discussion sur le lien entre différenciation des produits et activité de fusion et acquisition. [source]