Nonlinear Pricing and Oligopoly
نویسنده
چکیده
We consider the general problem of price discrimination with nonlinear pricing in an oligopoly setting where firms are spatially differentiated. We characterize the nature of optimal pricing schedules which in turn depends importantly upon the type of private information which the customer possesses – either horizontal uncertainty regarding brand preference or vertical uncertainty regarding quality preference. We show that as competition increases, the resulting quality distortions decrease, as well as price and quality dispersions. Additionally, we indicate conditions under which price discrimination may raise social welfare by increasing consumer surplus through encouraging greater entry. ∗University of Chicago, Graduate School of Business. This paper is a substantial revision of an earlier paper entitled “Oligopoly and Product Quality”, May 1992. I am grateful to Jim Dana, Sanjay Dhar, Vijay Fafat, Rob Gertner, David Martimort, Peter Pashigian, Canice Prendergast, Sherwin Rosen, Dan Spulber, Jean Tirole and seminar participants at Northwestern University, Penn State, MIT, University of Chicago, and the University of Illinois for helpful comments; I am thankful for financial support from the Centel Foundation/Robert P. Reuss Faculty Research Fund. Any errors are my own.
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تاریخ انتشار 2007