Price and quality competition: The effect of differentiation and vertical integration
Price and quality competition: The effect of differentiation and vertical integration
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DOI：
10.1016/j.ejor.2006.04.028
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发表时间：
2007-07
期刊：
影响因子：
--
通讯作者：
Nobuo Matsubayashi
中科院分区：
文献类型：
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作者：
Nobuo Matsubayashi
本文研究了最近互联网市场中企业之间价格和质量竞争的一个例子。消费者购买产品不仅看重价格，还看重质量水平；因此，两家公司在确定价格和质量水平方面进行竞争，以实现利润最大化。从微观经济的角度来描述这种竞争，我们考虑了企业可以用来克服竞争的两种可能的商业策略——差异化和与另一家互补企业的垂直整合。我们展示了一个在著名的伯特兰价格竞争中没有看到的有趣结果：差异化不仅总是增加企业的利润，而且还可以增加质量敏感市场中消费者的福利。我们进一步得出结论，在某些温和的条件下，排除与竞争对手产品的组合购买的垄断垂直整合对于整合后的公司及其消费者都是有利的。
This paper studies an instance of price and quality competition between firms as seen in the recent Internet market. Consumers purchase a product based on not only its price but also its quality level; therefore, two firms compete in determining their prices and quality levels to maximize their profits. Characterizing this competition from a microeconomic viewpoint, we consider two possible business strategies that firms can utilize to overcome the competition—the differentiation and the vertical integration with another complementary firm. We show an interesting result not seen in the well-known Bertrand price competition: not only does the differentiation always increase the firms’ profits, but also it can increase the consumer’s welfare in a quality-sensitive market. We further derive that under some mild conditions the monopolistic vertical integration that excludes the combination-purchase with a competitor’s product is beneficial for both the integrated firm and its consumers.