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Nonlinear Pricing and Oligopoly

Опубликовано на портале: 17-07-2007
Journal of Economics and Management Strategy. 2007.  Vol. 4. No. 4. P. 529-562. 
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 inflation 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.

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http://ideas.repec.org/a/bla/jemstr/v4y1995i4p529-62.html
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