Product design rivalry: Multiple-attributes approach to differentiation

Research output: Contribution to journalArticle

Abstract

This paper studies product design competition between potentially symmetric firms. We specifically employ the multiple-attributes approach as the method of product design. While various product-specific attributes contribute to firms' differentiation, they may cause confusion resulting in consumer dissatisfaction. We show that in the presence of these opposite effects and any setup costs for attributes, the differentiation by multiple attributes is beneficial for firms if, and only if they are moderately competitive. We furthermore show that the socially efficient number of attributes can only be sustained when there are not very many firms and the setup cost is low.

Original languageEnglish
Pages (from-to)555-563
Number of pages9
JournalManagerial and Decision Economics
Volume29
Issue number7
DOIs
Publication statusPublished - 2008 Oct

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Product design
Costs
Rivalry
Setup cost

ASJC Scopus subject areas

  • Business and International Management
  • Management of Technology and Innovation
  • Strategy and Management
  • Management Science and Operations Research

Cite this

Product design rivalry : Multiple-attributes approach to differentiation. / Matsubayashi, Nobuo.

In: Managerial and Decision Economics, Vol. 29, No. 7, 10.2008, p. 555-563.

Research output: Contribution to journalArticle

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