We consider a vertically differentiated duopoly where product quality is defined as the combination of N characteristics. Good (respectively, bad) characteristics are those which increase (decrease) utility with respect to the status quo. We prove that maximum (minimum) differentiation obtains along all characteristics respect to which marginal profits are positive (negative).

Good vs. bad characteristics in vertical differentiation / P.G. Garella, L. Lambertini. - In: ECONOMICS LETTERS. - ISSN 0165-1765. - 65:2(1999 Nov), pp. 245-248. [10.1016/S0165-1765(99)00143-3]

Good vs. bad characteristics in vertical differentiation

P.G. Garella
Primo
;
1999

Abstract

We consider a vertically differentiated duopoly where product quality is defined as the combination of N characteristics. Good (respectively, bad) characteristics are those which increase (decrease) utility with respect to the status quo. We prove that maximum (minimum) differentiation obtains along all characteristics respect to which marginal profits are positive (negative).
L13; Product characteristics; Vertical differentiation
nov-1999
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2434/43982
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