We allow quality variations in a duopoly of locationally differentiated products a-la-Hotelling (1929). We analyze the impact of quality variations on the choices of the varieties produced. We show that in a sequential game of variety choice and subsequent quality and price choice there exist only maximal variety differentiation equilibria in pure strategies. Maximal variety differentiation is ...

We study price personalization in a two period duopoly with vertically differentiated products. In the second period, firm not only knows purchase history of all customers, as standard Behavior Based Price Discrimination models, but it also collects detailed information on its old using to engage personalization. The analysis reveals that there exists natural market for each firm, defined set c...

This paper studies effects of price floors in a simple model of vertical product differentiation. We find that even non-binding price floors can increase quality on the market, if the cost of quality is sufficiently low. Where a binding price floor does not change the equilibrium quality, it makes consumers worse off. There is also a possibility of overinvestment into quality as a result of the...

Within a horizontal differentiation model and allowing for heterogeneous qualities, we analyze the effects of reference pricing reimbursement on firms' pricing strategies. With this analysis we find inherent incentives for firms' pricing behavior, and consequently we shed some light on the time consistency of such policy. The analysis encompasses different reference price rules: (i) reference p...

We study the market outcome that evolves in the long-run when price-setting firms, that compete in a differentiated market, are driven by an imitation dynamic. We find that the prices that can evolve in the long-run depend on the level of market differentiation and on the degree of oversight firms have on market decisions and outcomes. The unique symmetric pure Nash equilibrium price is always ...

The design and implementation of resource allocation and pricing for computing and network resources are crucial for system and user performance. Among various designing objectives, we target on maximizing the social welfare, i.e., the summation of all user utilities. The challenge comes from the fact that users are autonomous and their utilities are unknown to the system designer. Under the Ke...

Recent consumer research suggests that lowering search costs for quality information reduces consumer price sensitivity by creating greater perceived differentiation among brands (e.g., Kaul and Wittink 1995; Lynch and Ariely 2000). We argue that lowering quality search costs by smart agents can have the opposite effect on differentiation and price sensitivity. Smart agents screen through a uni...