Competing brands differ in the extent to which they offer a feature as standard or optional in their product lines. In this paper, we study the competitive basis for this difference in brands' product line strategies. Specifically, we analyze the relationship between a brand's quality image and...

We consider a model of quality competition among health care providers and demonstrate that the equilibrium in the market is characterized by strict differentiation in the quality of care that is offered to consumers. The market outcome generates excessive investment in quality in comparison to...