Strategic segmentation: when two monopolies are better than one

Bakó, Barna and Kálecz-Simon, András (2014) Strategic segmentation: when two monopolies are better than one. Working Paper. Corvinus University of Budapest Department of Microeconomics. (Unpublished)

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In this article we show that the price and the profit of an incumbent firm may increase after a new firm enters its market. Our analysis suggests that a well-established firm after competition emerges on its market might benefit from excluding some consumers from the low- end segment and concentrate only on its loyal consumers. We also find that strategic de-marketing can increase social welfare.

Item Type:Monograph (Working Paper)
Uncontrolled Keywords:product differentiation, consumer segmentation, marketing strategy
JEL classification:D43 - Market Structure and Pricing: Oligopoly and Other Forms of Market Imperfection
L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
M31 - Marketing
Funders:Lendület Fiatal Kutatói Program / Momentum Program of the Hungarian Academy of Sciences
Projects:'Lendület' Strategic Interactions Group
ID Code:1729
Deposited By: Barna Bakó
Deposited On:07 Nov 2014 12:52
Last Modified:07 Nov 2014 12:52

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