Pricing of related products by a multiproduct monopolist

1988 ◽  
Vol 3 (3) ◽  
pp. 55-73 ◽  
Author(s):  
Kevin F. Forbes
Keyword(s):  
Multiproduct Monopolist

The Bright Side of Having an Enemy

2019 ◽  
Vol 56 (4) ◽  
pp. 679-690 ◽  
Author(s):  
Mushegh Harutyunyan ◽  
Baojun Jiang
Keyword(s):  
Third Party ◽  
Differentiated Products ◽  
Product Reviews ◽  
Improve Product Quality ◽  
High Quality ◽  
Rating Agencies ◽  
Intense Competition ◽  
Retail Channel ◽  
Multiproduct Monopolist ◽  
Bright Side

Conventional wisdom suggests that more intense competition will lower firms’ profits. The authors show that this may not hold in a channel setting with exclusive retailers. They find that a manufacturer and its retailer can both become worse off if their competing manufacturer and retailer with quality-differentiated products exit the market. Put differently, in a channel setting, more intense competition can be all-win for the manufacturer, the retailer, and the consumers. Interestingly, a high-quality manufacturer can benefit from an increase in its competitor’s perceived quality (e.g., due to favorable product reviews from consumers or third-party rating agencies). In other words, a manufacturer may prefer a strong rather than a weak enemy, and the manufacturer can have an incentive to help its competitor improve product quality or remain in the market. Furthermore, the authors show that a multiproduct monopolist manufacturer with an exclusive retailer may make higher profits by spinning off a product into a competing manufacturer that has its own retail channel, even without accounting for any proceeds from the spinoff.

Quality choice of multiproduct monopolist and spill-over effect

1996 ◽  
Vol 52 (3) ◽  
pp. 345-352 ◽  
Author(s):  
Joo-Han Kim ◽  
Jae-Cheol Kim
Keyword(s):  
Multiproduct Monopolist ◽  
Quality Choice
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