Fuzzy products

Heyes, Anthony and Martin, Steven (2016) Fuzzy products. International Journal of Industrial Organization, 45. pp. 1-9. ISSN 0167-7187

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Abstract

A fuzzy product (FP) has characteristics specified only imprecisely at time of sale. Building fuzziness into its product gives a firm flexibility to exploit favorable supply opportunities that arise between sale and delivery, and so reduce expected costs. While increased competition reduces price, the effect on fuzziness is ambiguous. Socially optimal fuzziness is characterized. Firms provide goods that are too fuzzy compared to first best, though entry serves to correct this inefficiency for certain types of goods. Considering competition with a niche good, a FP sells for a lower price, although it captures a larger market share and is more profitable.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Economics
Depositing User: Stacey Goldup
Date Deposited: 08 Nov 2016 16:50
Last Modified: 08 Nov 2016 16:50
URI: http://sro.sussex.ac.uk/id/eprint/65374
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