Exploring Stackelberg profit ordering under asymmetric product differentiation

D.S. Banerjee, Ishita Chatterjee

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

The literature on differentiated products only considers symmetric cross-price effects and shows that the profit ordering of firms in a sequential set-up is uni-directional. This paper shows that uni-directional profit ordering breaks down under asymmetric product differentiation. Above a unique cross-price effect level the follower's profit exceeds that of the leader. The reverse is true below this level. This result holds for both substitutes and complements. © 2013 Elsevier B.V.
Original languageEnglish
Pages (from-to)309-315
JournalEconomic Modelling
Volume36
DOIs
Publication statusPublished - 2014

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