Strategic Implications of Market Share Attraction Models

Market share attraction models, which specify that a firm's market share is equal to the ratio of its “attraction” to the total attraction for all firms, have received increasing attention in recent years. However, there has been little research investigating the practical implications of such models. This paper presents a game-theoretic analysis of such a model and deduces the strategic implications of a Nash equilibrium solution to the model. It is shown that these implications are consistent with previous empirical research in marketing and business policy.