Journal article
Product customization
European economic review, v 51(6), pp 1396-1422
2007
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
The advent of the Internet has revolutionized the way companies advertise, develop and distribute products. Firms can now customize their advertising messages and products to the particular characteristics and needs of customers. Customers themselves can create their own products. We investigate investments by firms in product-customization capabilities within a duopoly model of horizontal product differentiation. We find that (i) if brand name effects are not too strong, one firm emerges as a leader in product customization—firms make asymmetric investments in product-customization technologies in order to reduce price competition, (ii) if brand name effects are strong,
both firms make extensive investments in product customization, and (iii) the possibility of product customization can raise industry profits if brand names are weak, but not when they are strong.
Metrics
Details
- Title
- Product customization
- Creators
- Dan Bernhardt - Department of Economics, University of Illinois at Champaign-Urbana, 1206 S. Sixth Street, Champaign, IL 61820, USAQihong Liu - Department of Economics, University of Oklahoma, 729 Elm Ave, Norman, OK 73072, USAKonstantinos Serfes - Drexel University
- Publication Details
- European economic review, v 51(6), pp 1396-1422
- Publisher
- Elsevier
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:000249742000004
- Scopus ID
- 2-s2.0-34548132784
- Other Identifier
- 991019168242704721
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- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Economics