Title: Does Product Differentiation relax Price Competition? An Experimental Answer
Abstract: The literature on product differentiation predicts that firms are likely to differentiate their products in order to relax price competition. We tested this theoretical result in a laboratory setting, by organizing twenty-four markets where products were offered with different quality levels. We compared two treatments which varied only in the degree of exogenous quality differentiation. The main result was that higher product differentiation determines low price competition and thus higher prices.
Publication Year: 2002
Publication Date: 2002-01-01
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 4
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