TY - JOUR
T1 - If at first you don't succeed...
T2 - Profits, prices, and market structure in a model of quality with unknowable consumer heterogeneity
AU - Krishna, Kala
AU - Winston, Tor
PY - 2003/5
Y1 - 2003/5
N2 - Why are higher quality niches seen as intrinsically more profitable in business circles? Why do high quality products sometimes have a low real price, whereas it is unusual to see low quality products with high real prices? Can markets have quality differentiation as well as quality bunching? How does the rate at which fixed costs change with quality affect market structure? In this article we develop a new model of quality that casts light on such issues.
AB - Why are higher quality niches seen as intrinsically more profitable in business circles? Why do high quality products sometimes have a low real price, whereas it is unusual to see low quality products with high real prices? Can markets have quality differentiation as well as quality bunching? How does the rate at which fixed costs change with quality affect market structure? In this article we develop a new model of quality that casts light on such issues.
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U2 - 10.1111/1468-2354.t01-1-00081
DO - 10.1111/1468-2354.t01-1-00081
M3 - Review article
AN - SCOPUS:30244510298
SN - 0020-6598
VL - 44
SP - 573
EP - 597
JO - International Economic Review
JF - International Economic Review
IS - 2
ER -