Nobuo Matsubayashi

Abstract In this study, we investigate price and quality decisions in a duopoly in the presence of firms’ quality positions , which are determined by the quality levels of their existing core products. Into a standard model of vertical differentiation, we incorporate a “repositioning cost” that is proportional to the quality differences between firms’ current and new products. By varying the levels of quality positions, we analyze the impact of this cost on the equilibrium outcomes. Our results

When a branded firm offers a new product at a quality level different from that of its existing product(s), some bias is often present as consumers are affected by the quality of the existing product(s) when evaluating the quality of the new one(s). Consequently, this product offering creates a forward spillover effect and, in turn, might even impact consumers’ utility from the existing product, referred to as the reciprocal spillover effect. Given the potential for such brand spillovers, how sh

This paper studies the competition between a single pure‐play e‐tailer and a bricks‐and‐mortar retailer, which are originally spatially differentiated. By utilizing information and communication technology, a pure‐play e‐tailer can strategically control consumers' disutility for online purchase. However, such an action may also raise consumers' motivation to visit the physical store, which causes free‐riding by the bricks‐and‐mortar retailer. We show that in the presence of a high free‐riding ef