Laboratory markets are conducted to evaluate the effects of consumer search costs on market performance. The primary research goal is to assess the behavioral relevance of Diamond’s (1971) paradoxical conclusion that the injection of a small consumer search cost alters the equilibrium price prediction from competitive to monopoly levels. Although monopoly prices are not consistently observed, w...

Examination of the relation between scale economies and natural monopoly has been a central issue in public policy research. The paper employs Data Envelopment Analysis (DEA) methodology to re-examine the issue of natural monopoly for the Bell system with annual time series data for 1947–1977. Results from the DEA-based statistical tests reveal the prevalence of increasing returns to scale for ...

We analytically characterize the effects of ownership and competition in the health care industry on quality provision, market coverage and optimal co-payment policy. A private monopoly selects a lower quality than a public supplier, and the socially optimal co-payment rate with a private monopoly exceeds that with a public monopoly. We establish that the optimal co-payment policy is invariant ...

In this article, optimal two-part tariffs of a bi-directional telecommunications service are examined. Heterogeneous users are assumed to formulate social demand for the service. Two regimes of supplier are considered: monopoly and non-monopoly. In the latter, the supplier which enjoyed monopoly is faced with the entry of a competitive mpplier. Demand externalities which are conspicuous in tele...

The goal of corporate activities is to make a profit, and it is prudent for companies to estimate the profitability of products they provide. For securement of sustainable profit, it is important to forecast long-term changes to variables which affect a system planning, such as customer’s characteristics, economic indicators and social conditions, as well as technical advancement. It is also ne...

C purchase conspicuous goods to satisfy not only material needs but also social needs such as prestige. In an attempt to meet these social needs, producers of conspicuous goods like cars, perfumes, and watches, highlight the exclusivity of their products. In this paper, we propose a monopoly model of conspicuous consumption using the rational expectations framework, and then examine how purchas...