Abstract

When firms compete on price and quality-enhancing promotion in a market for differentiated products, entry of a nearly perfect substitute to one of such products, for example, a generic version of a pharmaceutical drug, intensifies price competition but softens quality competition. We show that consumers are likely to gain from entry when quality is relatively unimportant for them, when business stealing generated by promotion is substantial, and when products are poor substitutes. We also show that entry may be more attractive for consumers in less concentrated markets, as a smaller number of firms and asymmetric market shares may be associated with higher quality.

中文翻译：

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抢占准完美替代品

摘要

当企业在差异化产品的市场上竞争价格和质量提升促销时，将其中一种近乎完美的替代品（例如，药品的仿制药）进入其中会加剧价格竞争，但会软化质量竞争。我们显示，当质量对他们而言相对不重要，促销带来的商业偷窃能力很强以及产品不是很好的替代品时，消费者很可能会从进入中受益。我们还表明，进入市场对集中度较低的消费者可能更具吸引力，因为公司数量较少和市场份额不对称可能与更高的质量相关。