Modeling demand for horizontally and vertically differentiated products: A partially ordered response model

Abstract

This paper develops a new discrete choice demand model, which captures competition among vertically differentiated alternatives. Products, which are vertically differentiated in terms of their quality, are produced by two different brands and consumers choose the brand-quality combination that maximizes their utility. We study the conditions for set or point identification of the structural parameters of the models with this kind of market structure. with Adam M. Roseny