Strategic Brand Proliferation: Monopoly vs. Duopoly ∗

This paper investigates the possibility that market competition may encourage a rm to proliferate its brand. To show this, using the multiproduct rm (MPF) model, we compare the incentive in monopoly with the one in duopoly. We nd that if rms compete in quantity and provide close substitutes, the incentive may be greater in duopoly than in monopoly. This is because the MPF brands may act as complements to each other in oligopoly, whereas they always act as substitutes in monopoly. This result is contrary to that of Judd [RAND J. Econ 16 (1985) 153].