Intense intra-brand competition reshapes market dynamics and boosts consumer welfare.
The article explores how competition between firms selling similar products affects market outcomes. By analyzing a scenario with two types of products and two groups of firms, the researchers found that changes in product substitutability and market composition can impact competition levels. They discovered that increasing competition can lead to changes in market structure and identified the equilibrium market composition based on profit motives. The results are based on the degree of product substitutability and a parameter called "weighted relative efficiency".