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.
Contents
Macroeconomic Impact on CEE Corporate Profitability: Analysis at the Level of Companies Listed on the Bucharest Stock Exchange
Financial Development and Economic Growth: A Panel Data Approach
Analysis of the Value Creation in Higher Institutions: A Relational Perspective
Effects of the Formula for Common Consolidated Corporate Tax Base Apportionment
European Economics, Update. Another Ten Theses on the Economic Integration
Importance of Partnership and Cooperation for Territorial Development
To Differentiate or Not to Differentiate: A Question when Some Consumers Are Loyal
Convergence of ABC and ABM Principles – Guarantee of a Performant Management