Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92616
Authors: 
Matsushima, Noriaki
Mizuno, Tomomichi
Year of Publication: 
2009
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 745
Abstract: 
Using a simple product differentiation model with elastic demands, we investigate the relationship between differentiation strategies and vertical relations. Depending on the competitive structure in the upstream market, three differentiation patterns (maximum, minimum and partial differentiation) can appear in equilibrium even though each downstream firm freely determines the degree of product differentiation. When downstream firms must incur positive investment costs to differentiate their products, they tend to do so if the upstream market is competitive.
Subjects: 
oligopoly
product differentiation
upstream firm
input specificity
JEL: 
L13
Document Type: 
Working Paper

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