On the Theory of the Price- and Quality-Setting Firm with Uncertain Demand.
A study was conducted to explore the effects of demand uncertainty on price and product quality for the price- and quality-setting firm in the context of a general profit relation. Findings revealed that a firm reduces price and improves quality in response to changes in demand risk when the expect...
| Publicado en: | Manchester School (14636786) Vol. 71; no. 6; pp. 626 - 641 |
|---|---|
| Autor principal: | |
| Formato: | Artículo |
| Publicado: |
Wiley-Blackwell
December 2003
|
| Materias: | |
| Acceso en línea: | Ver este registro en EBSCOhost |
| Sumario: | A study was conducted to explore the effects of demand uncertainty on price and product quality for the price- and quality-setting firm in the context of a general profit relation. Findings revealed that a firm reduces price and improves quality in response to changes in demand risk when the expected utility function is submodular; and that comparative statics predictions depend on the particular functional forms of demand uncertainty and of the cost function, and on whether the expected utility function is supermodular or submodular in relation to price and quality. |
|---|