scholarly journals Differentiated Entry or “Me-Too” Entry in Bertrand and Cournot Oligopoly

2021 ◽  
Author(s):  
James A. Brander ◽  
Barbara J. Spencer
Keyword(s):  
Product Differentiation ◽  
Cournot Oligopoly ◽  
Product Choice ◽  
Cournot Duopoly ◽  
The Cost

AbstractWhen would an oligopolistic entrant imitate an incumbent’s product (“me-too” entry), rather than horizontally differentiate? We allow an entrant's product choice to vary endogenously with the cost of product differentiation. Such endogenity of product differentiation significantly affects the comparison of Bertrand and Cournot duopoly. We find that if Bertrand entry occurs, products are differentiated, whereas there is a substantial region in which Cournot entry involves a homogenous product. Bertrand prices may be higher than Cournot prices; and, if product differentiation costs are low enough to induce Cournot differentiated entry, then Bertrand industry profit equals or exceeds Cournot industry profit.

The Choice of Prices versus Quantities under Outsourcing

2018 ◽  
Vol 18 (2) ◽  
Author(s):  
Ray-Yun Chang ◽  
Jin-Li Hu ◽  
Yan-Shu Lin
Keyword(s):  
Product Differentiation ◽  
Cost Efficiency ◽  
Intermediate Good ◽  
Price Strategy ◽  
Competition Strategy ◽  
Duopoly Model ◽  
The Cost ◽  
Prices Versus Quantities

Abstract This paper establishes a duopoly model with product differentiation and outsourcing in order to analyze the equilibrium competition strategies (choice of prices versus quantities) when the outsourcer outsources its intermediate good to a final product competitor. We show that: (1) both firms choose the quantity strategy when the cost efficiency of the subcontractor is low; (2) the choice of competition strategy is the price strategy for the subcontractor and the quantity strategy for the outsourcer when the cost efficiency of the subcontractor is moderate; (3) both firms choose the price strategy when the cost efficiency of the subcontractor is sufficiently high.

scholarly journals The Impact of Cost Uncertainty on Cournot Duopoly Game with Concave Demand Function

2013 ◽  
Vol 2013 ◽  
pp. 1-5 ◽  
Author(s):  
S. S. Askar
Keyword(s):  
Optimization Problem ◽  
Demand Function ◽  
Equilibrium Points ◽  
Cournot Duopoly ◽  
Worst Case ◽  
Dynamical Characteristics ◽  
Inflection Points ◽  
The Cost ◽  
The Impact ◽  
Theoretical Results

It is reported in the literature that the most fundamental idea to address uncertainty is to begin by condensing random variables. In this paper, we propose Cournot duopoly game where quantity-setting firms use nonlinear demand function that has no inflection points. A random cost function is introduced in this model. Each firm in the model wants to maximize its expected profit and also wants to minimize its uncertainty by minimizing the cost. To handle this multiobjective optimization problem, the expectation and worst-case approaches are used. A model of two rational firms that are in competition and produce homogenous commodities is introduced using an unknown demand function. The equilibrium points of this model are obtained and their dynamical characteristics such as stability, bifurcation, and chaos are investigated. Complete stability and bifurcation analysis are provided. The obtained theoretical results are verified by numerical simulation.

British Radio Marketing, Distribution, and Retailing

2017 ◽  
Author(s):  
Peter Scott
Keyword(s):  
Product Differentiation ◽  
Retail Trade ◽  
The Cost

This chapter concludes discussion of the inter-war radio market by examining the specific strategies used by independent radio manufacturers to develop distinctive brands and thus avoid falling under the control of larger radio companies. These include innovative marketing, product differentiation through innovations in design, and strong, cooperative links with the retail trade. It also examines two alternative channels of supply for radio reception that did not require purchasing a receiver—relay services (which provided radio services from central stations by wire relays) and set rentals. Both offered the potential to extend the market to families that struggled to afford the cost of a radio set and—in the case of wire relays—to families without mains electricity. However, the expansion of these services—especially wire relays—was constrained by the determined opposition of the mainstream radio trade.

Business Strategy and the Cost of Equity Capital: An Evaluation of Pure versus Hybrid Business Strategies

2018 ◽  
Vol 31 (2) ◽  
pp. 111-141 ◽  
Author(s):  
Mehdi Khedmati ◽  
Edwin KiaYang Lim ◽  
Vic Naiker ◽  
Farshid Navissi
Keyword(s):  
Product Differentiation ◽  
Business Strategy ◽  
Lower Cost ◽  
Equity Capital ◽  
Business Strategies ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Cost Leadership ◽  
Pure Product ◽  
The Cost

ABSTRACT We examine the effect of pure (product differentiation or cost leadership) versus hybrid (a mix of product differentiation and cost leadership) business strategies on the cost of equity capital. Our results suggest that firms with a pure, relative to a hybrid, business strategy have a significantly lower cost of equity, and the cost of equity effect is equally driven by pure product differentiation and pure cost leadership strategies. We also find that firms following a pure business strategy are associated with lower systematic risk. Further, the lower cost of equity effect of a pure product differentiation strategy is more pronounced in high-technology industries and in regions with greater innovative capital. Our findings are robust to an array of robustness checks including change specification regressions and various methods for addressing endogeneity. Data Availability: All data used in this study are publicly available from the sources identified in the paper.

Welfare implications of product choice regulation during the payout phase of funded pensions

2013 ◽  
Vol 13 (3) ◽  
pp. 272-296 ◽  
Author(s):  
VANYA HORNEFF ◽  
BARBARA KASCHÜTZKE ◽  
RAIMOND MAURER ◽  
RALPH ROGALLA
Keyword(s):  
Product Choice ◽  
Life Cycle Model ◽  
Cycle Model ◽  
Pension Systems ◽  
Regulatory Frameworks ◽  
The Us ◽  
Governmental Support ◽  
Funded Pensions ◽  
Welfare Implications ◽  
The Cost

AbstractIn many countries, governmental support for funded old-age programmes comes at the cost of at least partial mandatory annuitisation of accumulated assets in retirement. We survey regulatory frameworks for the payout phase of funded pension systems in seven European countries and the US and study the influence of mandatory annuitisation on the welfare of both rational and behaviourally influenced individuals using a dynamic life-cycle model. We show that mandatory immediate full annuitisation of retirement assets will reduce rational individuals’ certainty equivalent pension wealth by up to 54%. Softening the strict immediate annuitisation requirements along the line of regulatory realities in some of the surveyed countries reduces utility losses considerably. Behaviourally restricted individuals can benefit from full annuitisation at retirement, but generally they will also prefer more flexible regulation.

scholarly journals Pink Filter: Gender Effects in Meaningful and Meaningless Product Differentiation

2020 ◽  
Vol 21 (2) ◽  
Author(s):  
Camila Vincent de Urquiza ◽  
Alan Cooke
Keyword(s):  
Public Policy ◽  
Product Differentiation ◽  
Gender Effects ◽  
Product Features ◽  
Different Types ◽  
Product Marketing ◽  
The Cost ◽  
Google Search ◽  
The Impact

A simple Google search of the term “Pink Tax” pulls up thousands of results regarding “the cost of being a female consumer.” There is a belief that women’s products are priced more highly than men’s products to reap the benefits of women preferring female-targeted products. We sought to determine the prevalence of these beliefs and the efficacy of such marketing practices. We consider the impact of both meaningful (e.g., different product features) and meaningless (e.g., labelling) differentiation on consumers’ attitudes towards products. We propose that women have become skeptical towards meaningless product differentiation directed towards them. Whereas they respond favorably to products that target women through different ingredients and functionality, they respond more negatively to products that target women purely through packaging. We specifically looked at response to three products: sunscreen, razors, and protein bars and manipulated each product to isolate the effects of product features vs. the product advertising. Results were then measured to determine if different types of gender marketing affected women more strongly than they affected men. The results of this research have implications for product marketing campaigns and for public policy.

scholarly journals Technology Licensing between Rival Firms in Presence of Asymmetric Information

2017 ◽  
Vol 17 (1) ◽  
Author(s):  
Neelanjan Sen ◽  
Sukanta Bhattacharya
Keyword(s):  
Asymmetric Information ◽  
Low Cost ◽  
Technology Licensing ◽  
Cournot Duopoly ◽  
Cost Difference ◽  
Cost Information ◽  
Rival Firms ◽  
The Cost ◽  
Duopoly Market ◽  
Fixed Fee

AbstractThis paper investigates the possibility of licensing between rival firms in a Cournot duopoly market. Unlike Heywood, Li, and Ye (2014. “Per Unit vs. Ad Valorem Royalties under Asymmetric Information.” International Journal of Industrial Organization 37:38–46), the cost information of the licensee is private in the pre-licensing stage. If inspection of the licensee’s technology is not possible by the licensor i) technology is never transferred from the low-cost firm (licensor) to the high-cost firm (licensee) via fixed-fee and ii) in the case of royalty licensing technology will be transferred only if the cost difference between the firms is sufficiently high. Moreover, under fixed-fee and royalty licensing, the licensee will always allow the licensor to inspect its technology, if inspection is possible. If inspection is undertaken by the licensor, technology will be transferred i) if the cost difference is low via fixed fee and ii) always via royalty.

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