Characteristics approach session plan

Characteristics approach session plan - 4. How Lancaster...

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Characteristics approach: Session plan 1. Characteristics or attributes of the product rather than the product itself-Example: You prefer a certain food over other because it contains certain characteristics such as tastes, nutrients, flavours etc-So utility is derived from attributes but not from the goods themselves. 2. Limitations: How a new product fits in? Why butter and margarine are substitutes but book and pen are not. 3. Theoretical foundation-within utility maximization model
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Unformatted text preview: 4. How Lancaster tried to solve the questions he posed in the beginning 5. Contribution-a. role of price in determining demand for differentiated product; framework for estimating sensitivity of demand to changes in the relative price of brand, brand share determination and brand loyalty (Economics perspective) 6. Product divisibility problem-Reconciliation in hedonic pricing model....
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