Název: Why mixed qualities may not survive at equilibrium: the case of vertical product differentiation
Autoři: Burlakov, Georgi
Typ dokumentu: Výzkumné zprávy
Rok: 2016
Jazyk: eng
Edice: CERGE-EI Working Paper Series, svazek: 569
Abstrakt: In the classical literature on vertical differentiation, goods are assumed to be single products each offered by a different firm and consumed separately one from another. This paper departs from the standard setup and explores the price competition in a vertically differentiated market where a firm’s product is consumed not separately but in fixed one-to-one ratio with another complementary type of good supplied by a different producer. An optimal solution for market setting with two entrants of a type is proposed, to show that there could be an equilibrium at which the socalled ”mixed-quality combinations”, consisting of one high-quality good and one lowquality good each, remain unsold. For such an equilibrium to exist, it is sufficient the mixed-quality combinations to be at least as differentiated from the best as from the worst combination which retains its positive market share. Thus, the mixed-quality exclusionary outcome appears as a further form in which the well-known maximumdifferentiation principle could be implemented in a multi-market setting. It provides a new explanation of the self selection bias in consumption observed in some industries for complementary goods.
Klíčová slova: complementary goods; market foreclosure; vertical product differentiation

Instituce: Národohospodářský ústav AV ČR (web)
Informace o dostupnosti dokumentu: Dokument je dostupný na externích webových stránkách.
Externí umístění souboru: http://www.cerge-ei.cz/pdf/wp/Wp569.pdf
Původní záznam: http://hdl.handle.net/11104/0261658

Trvalý odkaz NUŠL: http://www.nusl.cz/ntk/nusl-253913


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