Spatial Competition in a Differentiated Market with Asymmetric Costs - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Spatial Competition in a Differentiated Market with Asymmetric Costs write by Tarek H. Selim. This book was released on 2020. Spatial Competition in a Differentiated Market with Asymmetric Costs available in PDF, EPUB and Kindle. Spatial quality choice is introduced, where consumers are horizontally differentiated by taste and firms vertically differentiated by quality location, within an equilibrium model of duopoly competition characterized by asymmetric fixed and variable costs. Firms choose quality location followed by prices but then may vertically re-locate their quality offerings based on changing horizontal consumer taste. A monopolistic equilibrium solution arises with firms achieving positive economic profits through price-quality markups exceeding marginal costs. Under strict inequality conditions, each firm acts as a monopolistic competitor within a range of quality choices governed by multiple relative differentiation outcomes. On the other hand, vertical re-location exhibits a resistance to change on the part of vertically located firms such that firms dislike quality re-location and prefer stable preferences in quality. Such resistance to change is overcome by firms re-locating their quality offerings to maximize monopolistic brand-space gains. It is argued that more horizontal differentiation may force more product differentiation by vertical quality relocation. A relative change in quality preferences may result in wider quality spreads in the market through vertical quality re-locations, even though the resistance to change arguments may still hold good.
Spatial Competition in Quality
Spatial Competition in Quality - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Spatial Competition in Quality write by Raphael Auer. This book was released on 2014. Spatial Competition in Quality available in PDF, EPUB and Kindle. We develop a model of vertical innovation in which firms incur a market entry cost and position themselves in the quality space. Once established, firms compete monopolistically, selling to consumers with heterogeneous tastes for quality. We establish existence and uniqueness of the pricing game in such vertically differentiated markets with a potentially large number of active firms. Turning to firms' entry decisions, exogenously growing productivities induce firms to enter the market sequentially at the top end of the quality spectrum. We spell out the conditions under which the entry problem is replicated over time so that each new entrant improves incumbent qualities in fixed proportions. Sequential market entry overcomes the asymmetry of the location problem, which unavoidably arises in the quality spectrum because of its top and bottom ends. Our main technical contribution lies in handling this asymmetry, a feature absent in Salop (1979) and other circular representations of Hotelling (1929) and Lancaster (1966).
Preemptive Entry in Differentiated Product Markets
Preemptive Entry in Differentiated Product Markets - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Preemptive Entry in Differentiated Product Markets write by Simon P. Anderson. This book was released on 2000. Preemptive Entry in Differentiated Product Markets available in PDF, EPUB and Kindle. Models of spatial competition are typically static, and exhibit multiple free-entry equilibria. Incumbent firms can earn rents in equilibrium because any potential entrant expects a significantly lower market share (since it must fit into a niche between incumbent firms) along with fiercer price competition. Previous research has usually concentrated on the zero-profit equilibrium, at which there is normally excessive entry, and so an entry tax would improve the allocation of resources. At the other extreme, the equilibrium with the greatest rent per firm normally entails insufficient entry, so an entry subsidy should be prescribed. A model of sequential firm entry (with an exogenous order of moves) resolves the multiplicity problem but raises a new difficulty: firms that enter earlier can expect higher spatial rents, and so firms prefer to be earlier in the entry order. This tension disappears when firms can compete for entry positions. We therefore suppose that firms can commit capital early to the market in order to lay claim to a particular location. This temporal competition dissipates spatial rents in equilibrium and justifies the sequential move structure. However, the policy implications are quite different once time is introduced. An atemporal analysis of the sequential entry process would prescribe an entry subsidy, but once proper account is taken of the entry dynamics, a tax may be preferable.
Spatial Competition and Equilibrium in a Circular Market
Spatial Competition and Equilibrium in a Circular Market - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Spatial Competition and Equilibrium in a Circular Market write by Andreas Kopp. This book was released on 1993. Spatial Competition and Equilibrium in a Circular Market available in PDF, EPUB and Kindle.
Price-response Asymmetry and Spatial Differentiation in Local Retail Gasoline Markets
Price-response Asymmetry and Spatial Differentiation in Local Retail Gasoline Markets - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Price-response Asymmetry and Spatial Differentiation in Local Retail Gasoline Markets write by Jeremy A. Verlinda. This book was released on 2007. Price-response Asymmetry and Spatial Differentiation in Local Retail Gasoline Markets available in PDF, EPUB and Kindle.
