Arbeitspapier
Competitive market segmentation
In a two-firm model where each firm sells a high-quality and a low-quality version of a product, customers differ with respect to their brand preferences and their attitudes towards quality. We show that the standard result of quality-independent markups crucially depends on the assumption that the customers' valuation of quality is identical across firms. Once we relax this assumption, competition across qualities leads to second-degree price discrimination. We find that markups on low-quality products are higher if consuming a low-quality product involves a firm-specific disutility. Likewise, markups on high-quality products are higher if consuming a high-quality product creates a firm-specific surplus.
- Sprache
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Englisch
- Erschienen in
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Series: Discussion Papers ; No. 13-13
- Klassifikation
-
Wirtschaft
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Oligopoly and Other Imperfect Markets
Information and Product Quality; Standardization and Compatibility
- Thema
-
price differentiation
vertical competition
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Sticher, Silvio
- Ereignis
-
Veröffentlichung
- (wer)
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University of Bern, Department of Economics
- (wo)
-
Bern
- (wann)
-
2013
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Sticher, Silvio
- University of Bern, Department of Economics
Entstanden
- 2013