Dynamic entry in vertically differentiated markets

被引:3
|
作者
Auer, Raphael A. [1 ,2 ]
Saure, Philip [3 ]
机构
[1] Bank Int Settlement, Basel, Switzerland
[2] CEPR, London, England
[3] Swiss Natl Bank, Zurich, Switzerland
关键词
Vertical differentiation; Product quality; Non-homogeneous preferences; Natural monopoly; Endogenous growth; Quality ladders; PRODUCT QUALITY; MONOPOLISTIC COMPETITION; INTERNATIONAL-TRADE; NATURAL OLIGOPOLIES; INCOME-DISTRIBUTION; PRICE-COMPETITION; MODELS; INDUSTRY; DEMAND; GROWTH;
D O I
10.1016/j.jet.2016.09.008
中图分类号
F [经济];
学科分类号
02 ;
摘要
We develop a model of vertical innovation in which firms incur a market entry cost and choose a unique level of quality. Once established, firms compete for market shares, selling to consumers with heterogeneous tastes for quality. The equilibrium of the pricing game exists and is unique within our setup. Exogenous productivity growth induces firms to enter the market sequentially at the top end of the quality spectrum. A central feature of the model is that optimization problems of consecutive entrants are self-similar so that new firms enter in constant time-intervals and choose qualities that are a constant fraction higher than incumbent qualities. The asymmetries of quality choice, which inevitably arise because the quality spectrum has top and a bottom, are thus overcome by sequential entry. Our main contribution lies in handling these asymmetries. (C) 2016 Elsevier Inc. All rights reserved.
引用
收藏
页码:177 / 205
页数:29
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