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| Author: | Anderson, E.T. |
| Title: | Sharing the wealth: when should firms treat customers as partners? |
| Journal: | Management Science
2002 : AUG, VOL. 48:8, p. 955-971 |
| Index terms: | Contracts Customer relationship management (CRM) Efficiency Marketing Pareto law |
| Language: | eng |
| Abstract: | Should companies be expected to partner with consumers and reach Pareto-efficient agreements? The author uses a example of a company's choice of product configuration to demonstrate two effects. 1) the author shows that a company may configure a product in a manner that reduces total surplus but increases company profits and 2) one might conjecture that increased competition would eliminate this effect, but the author shows that in a duopoly company profits may be increasing in the cost of product completion. |
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