Bidimensional vertical differentiation

B-Tier
Journal: International Journal of Industrial Organization
Year: 2014
Volume: 32
Issue: C
Pages: 1-10

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In markets where product quality is important, more than one characteristic is usually necessary for producers to define product quality. Standard theory maintains that: (i) in a duopoly there will be a quality leader no matter whether the product can incorporate one or two vertical attributes; (ii) differentiation pertains only to one attribute. By contrast, in our set-up, there are also equilibria where the quality leader is better in two attributes, and others where there is cross leadership, namely a situation where each firm designs a product to dominate the other in one characteristic. Applications to Minimum Quality Standards and tax (subsidy) on quality products are sketched, showing spill-over effects from one to the other quality dimension.

Technical Details

RePEc Handle
repec:eee:indorg:v:32:y:2014:i:c:p:1-10
Journal Field
Industrial Organization
Author Count
2
Added to Database
2026-01-25