The practice of firms co-creating products and services with their customers has a long history in business markets and, with advances in information technology, is now gaining increasing popularity in consumer markets as well. In this research we study the incentives of competing firms to...

Strategic trade theory has been criticized on the grounds that its predictions are overly sensitive to modeling assumptions. For example, Eaton and Grossman (1986) show that Brander and Spencer's (1985) seminal result - i.e., when firms compete by setting quantities the optimal policy involves...