| Paper Number | KCB-WP-2022-023 |
|---|---|
| Title | Vertically Differentiated Duopoly with Uncertain Taste Distributions |
| Title(Other) | |
| Author | Sungmin Lim ; Younghwan In |
| Publisher | KAIST College of Business |
| Abstract | We study a vertically differentiated duopoly with quadratic production costs where firms are uncertain about consumer taste distribution. We find two key results. First, when the quality difference is relatively greater (smaller) than the difference in the two firms' costs, uncertainty increases the market share of the high-quality (low-quality) product. Second, small degrees of uncertainty always increase social welfare. |
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