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Product Line Rivalry and Firm Asymmetry
Author(s) -
Chen Zhihong,
Chen Zhiqi
Publication year - 2014
Publication title -
the journal of industrial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.93
H-Index - 77
eISSN - 1467-6451
pISSN - 0022-1821
DOI - 10.1111/joie.12052
Subject(s) - rivalry , outcome (game theory) , asymmetry , product (mathematics) , product line , line (geometry) , economics , business , microeconomics , industrial organization , engineering , mathematics , physics , geometry , quantum mechanics , manufacturing engineering
We extend the B rander and E aton (1984) model of product line rivalry to study the effects of asymmetry between firms on the equilibrium outcome. Our analysis shows that market interlacing can emerge as the equilibrium outcome even in situations where market segmentation would have been the only possible outcome had the firms been symmetric. We identify two strategic factors that lead to such an outcome.