Game-changing strategy reveals how firms dominate quality investments and price competition.
The study looked at how companies decide when to invest in improving the quality of their products and how this affects pricing in the market. They found that companies can choose to invest in quality at different times, leading to different outcomes. In some cases, companies always invest in quality one after the other. They also found that when companies use a mix of strategies, there is a higher chance of getting results that are not ideal. Additionally, when companies aim to cover the entire market, the decision on when to invest in quality becomes less important as different strategies lead to the same results.