Another type of non-price competition could be on the basis of "feature sets." You may have noticed that for most fairly high-tech consumer item such as VCRs, Camcorders, Stereos, Autos, Computers etc. it is almost impossible to find models from competing firms with identical feature sets or options. There will almost invariably be at least a few minor differences.

   This may be because the payoff matrix is like the one to the right. Notice that there are two Nash Equilibria here both involving having different sets of features. This makes it more difficult for consumers to compare competing products direction and so direct price competition isn't as great an issue and both firms can maintain higher prices and higher profits.

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