False quality strategy of monopoly enterprises based on vertical product differentiation

In the market of product differentiation, consumers usually judge the quality of products through price because of the asymmetry of product quality information, which provides an opportunity for enterprises to use false quality. Based on vertical product differentiation, this paper constructs a product pricing model with different quality of monopolistic market, and studies whether monopoly enterprises are motivated to adopt false quality when product quality information is asymmetric. If there is such motive, the selection of the quality strategy of monopoly enterprises and its influencing factors are analyzed. Research shows that monopoly enterprises are motivated to use false quality for both high and low quality products, and the specific quality strategy depends on the quality difference degree of high and low quality products, the cost difference degree and the degree of falseness used for high and low quality products. © 2020, Editorial Office of Control and Decision. All right reserved.