Abstract
This paper studies how the public sustainability concerns affect a firm’s decisions of product line design under different channel structures. Both centralized distribution channel and decentralized distribution channel are taken into consideration. Our research shows that the public sustainability concerns can make the centralized firm shorten its product line when the coefficient of consumer mismatching disutility is moderate. In addition, when the centralized firm makes the decision of product line extension from the aspect of maximizing social welfare, a relative low level of the public sustainability concerns can incent it to extend the product line. The public sustainability concerns are shown to be able to weaken the positive impact of channel decentralization that has on product line extension when the coefficient of consumer mismatching disutility is moderate as well.
Published Version
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