Repository logo
 
No Thumbnail Available
Publication

Vertical product differentiation in the lab: impact of consumers’ preferences

Use this identifier to reference this record.
Name:Description:Size:Format: 
104787715.pdf275.31 KBAdobe PDF Download

Advisor(s)

Abstract(s)

We revisit a quality-then-pricing duopoly game, theoretically and experimentally exploring how heterogeneity in consumers’ preferences affects firms’ decisions and profits. We find that firms differentiate less their products in the lab than the theoretical model predicts, especially when the heterogeneity in consumers’ preferences is high. When this heterogeneity is small, the firm producing the low-quality good profits more than the rival in the lab, which contradicts the theoretical predictions.

Description

Keywords

Vertical product differentiation Consumers’ preferences Experimental economics

Citation

Research Projects

Organizational Units

Journal Issue

Publisher

CC License