Competition between branded and nonbranded firms and its impact on welfare.
We examine a quantity competition among branded and nonbranded firms. The market comprises two consumer segments: one purchases only branded products (the high‐end market), while the other segment's consumers purchase less expensive products (the low‐end market). When branded firms take actions sequ...
| Published in: | Southern Economic Journal Vol. 87; no. 2; pp. 647 - 666 |
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| Format: | Article |
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Wiley-Blackwell
Oct2020
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| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=146607930&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 146607930 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00384038 SEJ jtl: Southern Economic Journal issn: 00384038 maglogo: N pubinfo: dt: Oct2020 vid: 87 iid: 2 pid: 480 pub: Wiley-Blackwell artinfo: ui: 146607930 10.1002/soej.12456 ppf: 647 ppct: 19 formats: fmt: – @attributes: type: T – @attributes: type: C – @attributes: type: P size: 1.9MB tig: atl: Competition between branded and nonbranded firms and its impact on welfare. aug: au: Pan, Cong affil: Kyoto Sangyo University, Kyoto, , Japan su: Business enterprises Market segmentation Consumers' surplus Imperfect competition sug: subj: Business enterprises Market segmentation Consumers' surplus Imperfect competition keyword: excessive entry imperfect competition market segmentation excessive entry imperfect competition market segmentation ab: We examine a quantity competition among branded and nonbranded firms. The market comprises two consumer segments: one purchases only branded products (the high‐end market), while the other segment's consumers purchase less expensive products (the low‐end market). When branded firms take actions sequentially, we show that the branded leader has an incentive to restrict its quantity to avoid entering the low‐end market. As the follower recognizes this incentive, it can restrict the leader by implementing a quantity constraint, which is affected by the number of nonbranded firms. We find that both the branded leader and follower could benefit from the nonbranded firms and that the leader prefers to have more nonbranded firms in the market than the follower does. Furthermore, we show that the free entry of nonbranded firms could negatively affect total surplus as well as consumer surplus even without any costs, because of the premium pricing of branded products. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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