PRODUCT FUNCTIONALITY, COMPETITION, AND MULTIPURCHASING

• 成果类型: Article
• 署名作者: Anderson, Simon P.; Foros, Oystein; Kind, Hans Jarle
• 署名单位: University of Virginia; Norwegian School of Economics (NHH)
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12213
• 发表日期: 2017
• 页码: 183-210
• 关键词: principal-agent problems; 1st-order approach; incomplete contracts; information-systems; moral hazard; ranking; incentives; RISK; contingencies; models

摘要

The more functionalities a good offers, the greater is its perceived quality. Equilibrium prices in standard spatial competition models depend solely on quality differences. We assume that new functionalities are more appreciated the closer a product is to a consumer's ideal variety. Prices are then increasing in functionality levels. Furthermore, we endogenize whether consumers buy only one of two varieties (single-purchase) or both (multipurchase). Under multipurchase, there might be a hump-shaped relationship between equilibrium prices and functionality levels. Therefore, it could be optimal for each supplier to sacrifice sales and set prices so high that multipurchase is eliminated.