This paper demonstrates that, under a set of weak assumptions, increased product differentiation will make it more difficult to sustain collusion when it is costly either to coordinate or to maintain collusion. These results contrast with the previous theoretical literature, which shows that, in the absence of these costs, greater differentiation can help foster collusion under some common mode...

with increasing competition in today’s markets, the vital point for companies is to maintain their market shares. therefore, marketers try to vitalize the companies’ brands, in order to maintain their position in market. whereas, creation a new brand is very costly and time consuming and its chance of success is limited, nowadays, more than ever, marketers are trying to achieve their goals thro...

Standard merger simulations focus solely on price changes while constraining the set of product characteristics to be identical preand post-merger. Recent papers have begun to address this issue (see, e.g. Fan, August 2013 AER). To overcome the limitations of traditional simulations, I endogenize both prices and product characteristics by specifying a two-stage oligopoly game. After estimating ...

Previous theoretical researches show that learning from good performers yields intense competition and results in the low profitability of firms. These researchers do not take into account differentiation strategies being referred as a useful strategic tool to mitigate competition. We introduce an evolutionary (learning) game into a duopoly model with product differentiation on the Hotelling li...

In this note, we analyze the equilibrium outcomes of pricing games with product differentiation in relation with the extent of market coverage. It is a received idea in the IO literature that the horizontal and vertical models of product differentiation are almost formally equivalent. We show that this idea turns out to be wrong when the full market coverage assumption is relaxed. We then argue...

Previous theoretical researches show that learning from good performers yields intense competition and results in the low profitability of firms. These researchers do not take into account differentiation strategies being referred as a useful strategic tool to mitigate competition. We introduce an evolutionary (learning) game into a duopoly model with product differentiation on the Hotelling li...

We analyze models of product differentiation with perfect price discrimination and free entry. With a fixed number of firms, and in the absence of coordination failures, perfect price discrimination provides incentives for firms to choose product characteristics in a socially optimal way. However, with free entry, the number of firms is always excessive. Our results apply to a large class of mo...