Multi-Product Duopoly With Cross-Product Cost Interdependencies
نویسندگان
چکیده
Many multi-product firms incur a complexity fixed cost when offering different product lines in different quality tiers relative to the case when offering all products lines in the same quality tier (high or low). Such fixed costs create an interdependency between firms’choices of quality tiers across different product lines, even when demands are independent. We investigate the effects of this interdependency on equilibrium profits in a Stackelberg duopoly game. Both firms’profits are (weakly) higher when the complexity cost is infinite than when it is 0. The Stackelberg leader’s profits are always (weakly) higher with a positive complexity fixed cost, but its profits can be nonmonotonic in the magnitude of this cost. The Stackelberg follower’s profits can be lower when the complexity fixed cost is positive than when it is equal to 0. JEL Classifications: L1, L2, L8
منابع مشابه
Multi-objective optimization approach for cost management during product design at the conceptual phase
The effective cost management during the conceptual design phase of a product is essential to develop a product with minimum cost and desired quality. The integration of the methodologies of quality function deployment (QFD), value engineering (VE) and target costing (TC) could be applied to the continuous improvement of any product during product development. To optimize customer satisfaction ...
متن کاملA Multi-Periodic Multi-Product Inventory Control Problem with Discount: GA Optimization Algorithm
In this article, a finite horizon, multi product and multi period economic order quantity like seasonal items is considered where demand rate is deterministic and known but variable in each period. The order quantities of items come in batch sizes and the end of the period order quantity and, consequently, demand of customers are zero. In addition, storage space is constrained and the problem...
متن کاملA new multi-mode and multi-product hub covering problem: A priority M/M/c queue approach
One main group of a transportation network is a discrete hub covering problem that seeks to minimize the total transportation cost. This paper presents a multi-product and multi-mode hub covering model, in which the transportation time depends on travelling mode between each pair of hubs. Indeed, the nature of products is considered different and hub capacity constraint is also applied. Due to ...
متن کاملBi-objectives Approach for a Multi-period Two Echelons Perishable Product Inventory-routing Problem with Production and Lateral Transshipment
In this study, a two echelons supply chain system in which a supplier is producing perishable product and distribute it to multiple customers is considered. By allowing lateral transshipment mechanism, it is also possible to deliver products to some customers in some periods in bulk, then customers using their own vehicle to transship goods between each other seeking further reduction in the ov...
متن کاملFDI Spillovers and Intellectual Property Rights
This paper extends Symeonidis (2003)’s duopoly model with product differentiation to discusses how FDI spillovers that decreases the quality difference between vertically differentiated products of the home and foreign firms affects the home firm’s decision on plant location. This paper shows that whether the degree of spillover is exogenous or endogenous, it may have a positive relationship wi...
متن کامل