search query: @author Rhee, B-D. / total: 1
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Author: | Rhee, B-D. |
Title: | Consumer heterogeneity and strategic quality decisions |
Journal: | Management Science
1996 : FEB, VOL. 42:2, p. 157-172 |
Index terms: | PRODUCT DIFFERENTIATION QUALITY DECISION MAKING |
Language: | eng |
Abstract: | Most analytical models of product positioning prescribe quality differentiation as an equilibrium strategy in a variety of noncooperative situations. Products of similar qualities are often observed in the marketplace. This study presents an explanation for the existence of similar qualtites in a Bertrand framework. The study allows heterogeneity not only in marginal willingness to pay for quality, but along unobservable attributes as well. Choice is modeled in such a way that consumers consider both the quality and price of a product and their heterogeneous preferences along the unobservable attributes. However consumers choices are random along the unobservable attributes from firms' perspective, due to the intractability of the attributes. |
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