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IOR
2007

Competition in Service Industries

13 years 11 months ago
Competition in Service Industries
We analyze a general market for an industry of competing service facilities. Firms differentiate themselves by their price levels and the waiting time their customers experience, as well as different attributes not determined directly through competition. Our model therefore assumes that the expected demand experienced by a given firm may depend on all of the industry’s price levels as well as a (steady state) waiting time standard, which each of the firms announces and commits itself to by proper adjustment of its capacity level. We focus primarily on a separable specification, which, in addition is linear in the prices. (Alternative non-separable or non-linear specifications are discussed in the concluding section.) We define a firm’s service level as the difference between an upper bound benchmark for the waiting time standard (w) and the firm’s actual waiting time standard. Different types of competition and resulting equilibrium behavior may arise, depending on t...
Gad Allon, Awi Federgruen
Added 15 Dec 2010
Updated 15 Dec 2010
Type Journal
Year 2007
Where IOR
Authors Gad Allon, Awi Federgruen
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