Nesting horizontal and vertical differentiation

Gabszewicz, Jean Jaskold; Wauthy, Xavier

doi:10.1016/j.regsciurbeco.2011.10.004

Cited by 20 publications

(58 citation statements)

References 6 publications

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“…In this paper, we develop a stylised Hotelling (1929) model to investigate wearable device firm's optimal decisions about BDA adoption and investment. Considering consumers' different attitudes towards BDA of wearable devices, we introduce consumer densities of firms in the model (Gabszewicz and Wauthy 2012). Adapted from prior literatures about R&D intensity (Hashai and Almor 2008;Nunes, Serrasqueiro, and Leitão 2012;Honoré, Munari, and de La Potterie 2015), we introduce the term of BDA intensity to denote firm's effort on BDA investment to improve consumer's perception on its product.…”

Section: Conclusion and Discussionmentioning

confidence: 99%

“…We identify consumers' heterogeneous product preferences in a stylised horizontal product differentiation model (Hotelling 1929). Inspired by the work of Gabszewicz and Wauthy (2012), we consider consumer's predisposed preferences on BDA by introducing different consumer densities. Adapted from prior literatures about R&D intensity, which represents an innovated firm's effort on R&D investment (Hashai and Almor 2008;Nunes, Serrasqueiro, and Leitão 2012;Honoré, Munari, and de La Potterie 2015), we define a term of BDA intensity to denote how much effort a health care wearable device firm has made on BDA investment.…”

Section: Literature Reviewmentioning

confidence: 99%

“…We design a competition model between two wearable device firms with and without BDA strategies. To investigate the effects of consumer type, we measure consumer's predisposed preference by introducing firms' different consumer densities in the model (Gabszewicz and Wauthy 2012). We also study the impact of network effects as a linear function of the size of user base (Etzion and Pang 2014) in our research model because the consumers' decisions are affected by their 'friendships' more in the age of social media.…”

Section: Introductionmentioning

confidence: 99%

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How big data and analytics reshape the wearable device market – the context of e-health

Lin

et al. 2015

International Journal of Production Research

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The wearable device can be a key link between health care and big data and analytics (BDA). The benefits of BDA in health care have been widely acknowledged, but the uncertainty of the implementation of BDA has led some firms to hesitate in adopting this technology. In this research, we are keen to answer the key questions of whether the wearable device firms would adopt the BDA strategy, and how much effort they would put into it. We propose a competition model between the wearable device firms with and without BDA strategies, and consider the consumer's preference towards BDA and network effects. Our model demonstrates that the investment on BDA directly affects the firm's equilibrium price, market share and profit and at the same time, this strategy also affects the rival's performances. When the firm with BDA strategy adopts different competition strategy: conservative or expansive, the outcomes of market are different. We also find that different market structures, fully covered and partially covered, have different impacts on the firms' competition when the consumers have heterogeneous preference on BDA strategy.

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Section: Conclusion and Discussionmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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How big data and analytics reshape the wearable device market – the context of e-health

Lin

et al. 2015

International Journal of Production Research

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“…One can notice, for example, that the area where the price switch does not occur is larger in Figure 2. 25 …”

Section: Proof It Is Relatively Easy To Show That All the Relevant Tmentioning

confidence: 99%

“…Third, at this monopoly equilibrium con…guration, for extremely high intensity of relative preferences, the green monopolist extends the market coverage farther than what is typically observed in a vertically di¤erentiated setting, thereby 7 There is strand of literature combining horizontal and vertical di¤erentiation. See among others, Gabszewicz and Thisse (1986), Neven and Thisse (1990), and more recently Gabszewicz and Wauthy (2012).…”

Section: Introductionmentioning

confidence: 99%

Hedonic Quality and Social Norms: A Hybrid Model of Product Differentiation

2015

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We analyse how strategic competition between a green …rm and a brown competitor develops when their products are di¤erentiated along two dimensions: hedonic quality and environmental quality. The former dimension refers to the pure (intrinsic) performance of the good, whereas the latter dimension has a positional content: buying green goods satis…es the consumers' desire to be socially worthy citizens. Product variants thus comply at di¤erent levels with "green" social norms. Consumer preferences depend on a combination of hedonic quality and compliance with social norms. Assuming that the high hedonic quality variant complies less with these norms than the low hedonic quality variant, we characterize di¤erent equilibrium con…gurations which appear as a result of both the intensity of such norms and the willingness to pay for the hedonic quality. Afterwards, we discuss the policy implications of our analysis. Keywords: Hedonic quality, environmental quality, relative preferences.JEL Classi…cation: D62; L13; H13.This working paper is the revised and updated version of the Working Paper DSE N 950. In this new version, we point out the economic e¤ects of strategic competition when products are di¤erentiated along two dimensions that give rise to a hybrid model of product di¤erentiation. We are grateful to

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Classic Spatial Models

Colombo

2020

Spatial Economics Volume I

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Nesting horizontal and vertical differentiation

Cited by 20 publications

References 6 publications

How big data and analytics reshape the wearable device market – the context of e-health

How big data and analytics reshape the wearable device market – the context of e-health

Hedonic Quality and Social Norms: A Hybrid Model of Product Differentiation

Classic Spatial Models

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