Product Line Rivalry

14 Pages Posted: 11 Dec 2012

See all articles by Darlene C. Chisholm

Darlene C. Chisholm

Suffolk University

George Norman

Tufts University - Department of Economics

Date Written: December 2012

Abstract

We analyse how product line rivalry by multi‐product oligopolists is affected by market size and product substitutability. We show that the width and degree of overlap in competing product lines is determined by the tension between two effects: the drive to ‘be where the demand is’ and the desire to weaken competition and intra‐firm product cannibalization. Product lines are shown to be wider and more overlapped in large markets and when product substitutability is weak. Our analysis suggests that firms can increase their profits by agreeing not to overlap their product lines.

Keywords: product line rivalry, market size, product substitutability

JEL Classification: L13, D21, D43

Suggested Citation

Chisholm, Darlene C. and Norman, George, Product Line Rivalry (December 2012). Bulletin of Economic Research, Vol. 64, pp. s109-s122, 2012, Available at SSRN: https://ssrn.com/abstract=2187714 or http://dx.doi.org/10.1111/j.1467-8586.2011.00414.x

Darlene C. Chisholm (Contact Author)

Suffolk University ( email )

Department of Economics
8 Ashburton Place
Boston, MA 02108
United States
617-305-1932 (Phone)
617-994-4216 (Fax)

HOME PAGE: http://www.suffolk.edu/college/3255.html

George Norman

Tufts University - Department of Economics ( email )

Medford, MA 02155
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
3
Abstract Views
449
PlumX Metrics