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| Author: | Candy, M. Peitz, M. |
| Title: | The differentation triangle |
| Journal: | Journal of Industrial Economics
1997 : SEP, Vol. 45:3, p. 305-328 |
| Index terms: | QUALITY SUBSTITUTE GOODS PRICE LEVEL |
| Language: | eng |
| Abstract: | This paper formalizes the observation that submarkets for high-quality and low-quality variants are markedly different from each other. We study a simple model where variants of low quality cannot be horizontally differentiated, whereas customers disagree about the value of variants in the high-quality range. We determine the outcome under price competition in the differentiation triangle with sequential entry when each firm can develop the vertical product line or decide to follow a niche strategy. |
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