Author(s)

Wangyan Xie^*

Jinan University, Guangzhou, China.

We address the effect of the effect of benchmark effect of industry prominent firm for the influence of the duopoly competition. Consumers always consider prominent firms as the industry benchmark, when they evaluate other firms’ product, treating prominent firm as a reference point, thus show the loss aversion behavior. We find that benchmarking effect of the prominent firm makes consumer surplus increase, while decreases both firms’ profits.

Benchmark Effect, Prominent Firm, Loss Aversion

Xie, W. (2016) Price and Service Quality Competition with Benchmark Effect. Open Journal of Social Sciences, 4, 141-146. doi: 10.4236/jss.2016.42019.