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Rajeev Tyagi
''On Firms' Preferences for Product Differentiation''
( 2005, Vol. 12 No.17 )
We examine firms' preferences for product differentiation when a firm has a demand-side and/or a cost-side advantage over its competitor. We show that if the magnitude of these advantages is small, then both firms prefer more differentiated products. However, if the magnitude of demand-side (cost-side) advantage is larger, then only the advantaged (disadvantaged) firm prefers more differentiated products.
Keywords: Competition
JEL: L1 - Market Structure, Firm Strategy, and Market Performance: General
D4 - Market Structure and Pricing: General
Manuscript Received : Sep 19 2005 Manuscript Accepted : Oct 06 2005

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