Theoretical and Applied Economics
No. 10 / 2010 (551)
To Differentiate or Not to Differentiate: A Question when Some Consumers Are Loyal
Gongshangnansuo Jiashuyuan, Juancheng, Shandong Province, China 274600
Abstract. I analyze a duopoly that competes first in product characteristics and then in prices. I show that when there exist consumers that are loyal to specific brands with no regard for product characteristics, the second-stage price game doesn’t have a pure-strategy equilibrium or symmetric mixed-strategy equilibrium and the firms choose to maximize their product differentiation in the first stage, contrary to what is usually assumed in the price dispersion literature.
Keywords: pricing; product differentiation; price competition.
Contents
- Macroeconomic Impact on CEE Corporate Profitability: Analysis at the Level of Companies Listed on the Bucharest Stock Exchange
Cristina Maria TRIANDAFIL
Petre BREZEANU
Leonardo BADEA
- Financial Development and Economic Growth: A Panel Data Approach
Nuno Carlos LEITÃO
- Analysis of the Value Creation in Higher Institutions: A Relational Perspective
Raquel SÁNCHEZ-FERNÁNDEZ
M. Ángeles INIESTA-BONILLO
Walesska SCHLESINGER-DÍAZ
Pilar RIVERA-TORRES
- Effects of the Formula for Common Consolidated Corporate Tax Base Apportionment
Gheorghe MATEI
Daniela PÎRVU
- Importance of Partnership and Cooperation for Territorial Development
Anna VAŇOVÁ
Kamila BORSEKOVÁ
Miroslav FORET
- Convergence of ABC and ABM Principles – Guarantee of a Performant Management
Sorinel CĂPUŞNEANU
Dana-Maria MARTINESCU