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Journal article
Beyond plain vanilla: Modeling joint product assortment and pricing decisions
Quantitative marketing and economics, v 7(2), pp 105-146
01 Jun 2009
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Abstract
This paper investigates empirically the product assortment strategies of oligopolistic firms. We develop a framework that integrates product choice and price competition in a differentiated product market. The present model significantly improves upon the reduced-form profit functions typically used in the entry and location choice literature, because the variable profits that enter the product-choice decision are derived from a structural model of demand and price competition. Given the heterogeneity in consumers' product valuations and responses to price changes, this is a critical element in the analysis of product assortment decisions. Relative to the literature on structural demand models, our results show that incorporating endogenous product choice is essential for policy simulations and may entail very different conclusions from settings where product assortment choices are held fixed.
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Details
- Title
- Beyond plain vanilla: Modeling joint product assortment and pricing decisions
- Creators
- Michaela Draganska - Stanford UniversityMichael Mazzeo - Northwestern UniversityKatja Seim - University of Pennsylvania
- Publication Details
- Quantitative marketing and economics, v 7(2), pp 105-146
- Publisher
- Springer Nature
- Number of pages
- 42
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Marketing
- Web of Science ID
- WOS:000266251300001
- Scopus ID
- 2-s2.0-67349192283
- Other Identifier
- 991021810268104721
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- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Business
- Economics
- Social Sciences, Mathematical Methods