Product Line Rivalry: A Further Analysis

In this paper we conduct a further analysis on the Brander and Eaton (1984) model of product line rivalry by examining two cases that have not been studied previously. The common feature shared by these two cases is asymmetry between firms. Specifically, we examine situations where either a) the firms have different marginal costs, or b) they choose quantity sequentially. Our analysis shows that each of these asymmetries between firms can lead to market interlacing in equilibrium.