This paper analyzes optimal product lines when consumers differ both in their taste for, quality and in their desire for social image. The market outcome features partial pooling and, product differentiation that is not driven by heterogeneous valuations for quality but by image, concerns. A typical monopoly outcome is a two-tier product line resembling a “masstige”, strategy as observed in luxury ...
Munich, Germany:
Collaborative Research Center Transregio 190,
2018,
36 S. : Anh.
(Discussion Paper / Rationality & Competition, CRC TRR 190 ; 70)
| Jana Friedrichsen
One important function of consumption is for consumers to show off their taste, virtue or wealth. While empirical observations suggest that producers take this into account, existing research has concentrated on analyzing the demand side. This paper investigates how a monopolist optimally designs its product line when consumers differ both in their taste for quality and their desire for a positive ...
Berlin:
WZB,
2016,
48, 21 S.
(Discussion Paper / Wissenschaftszentrum Berlin für Sozialforschung ; SP II 2016–202)
| Jana Friedrichsen