产业组织chapter4产品差异化技巧.ppt

CHAPTER 4;§1 characteristic approach ;Most real-world examples combine elements of horizontal and vertical product differntiation.In fact,whenever products are defined by more than one characteristic, even if consumers agree that more of each characteristic is better.;2.characteristic approach(K.J.Lancaster,1966);An example：the demand for automobiles;;consumers valuation of characteristics;Net utility for buyers;The adventages from characteristics approach It allows for a genaral treatment of product differentiation that encompasses horizontal and vertical differiation It allows for significant improvements in empirical estimation of consumer demand It providers a useful framework for businiss strategy.;Application of characteristics approach：blue ocean strategy and value curve;§2 Fundamental models for differentiated products ;We can define a measure for the degree of product differentiation by δ: when δ→0,it implies higher differentiation； when δ→1,it implies lower differentiation Rethinking the relationship between value of δ and best-response curves?;Measuring the degree of product differentiation and the cross-price effect/own-price effect ;2.Quantity game with differentiated products under the Cournot market structrue Demand functions given in： Profit functions： Best-response functions： ;NE： When b2→0，each firm and aggregate quantity produced , the prices and the profits all increase.;As b1→b2,the best-response curve becomes steeper,thereby making the profit-maxizing output level of firm more sensitive to changes in the output level of firm 2 ;3.Bertrand game with differentiated products Demand functions： profit functions： F.O.C. ;Add parameters to the best-response functions： NE： Hence, the profits of firms under differentiated Bertrand structure (b2→0)，differentiation increases the monopoly power;When b2 →0 , response curve is flatter , it implies differentiation increases monopoly power. ;Cournot V.S. Bertrand in differentiated products (1)The market