The aim of this activity is to learn a new concept, relate it to materials covered in the class, and apply
it to some real business situation. Teams are encouraged to be creative in identifying applications of the
concept and tap information from sources such as The Wall Street Journal and other press articles,
customer interviews, research papers, and market research studies. Each team is expected to submit a
summary report not exceeding two pages (single spacing, font size 12, Calibri or equivalent)
presentation topic :vertical differentiation
Please see attached two files that you can use as reference. They are taken from
Introduction to Industrial Organization by Luis M.B. Cabral (2000) MIT Press, and
The Theory of Industrial Organization by Jean Tirole (1988) MIT Press.
Feel free to use additional references (such as papers, news articles, book chapters, online lectures, etc.).
You are expected to prepare and explain the concept of vertical differentiation to the class. Please do not use too much math in your presentation and focus on communicating the basic idea. Your presentation as well as your report should deliver a response to the following questions:
1. What is vertical differentiation and how is it different from horizontal differentiation?
2. Is it possible for a competing firm to lower its product quality and as a result make higher profit? If yes, How?
Present at least three real-world examples to explain the concept of vertical differentiation.
6 page powerpoint answer these two questions, and also include three real world examples.
need picture in the powerpoint also speakernotes(simple language, easy to present).
summary report in pdf base on these two question, each question one page.
