Regulating a monopolist with unknown costs and unknown quality capacity
Blackorby, Charles and Szalay, Dezsö (2008) Regulating a monopolist with unknown costs and unknown quality capacity. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.858).
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We study the regulation of a firm with unknown demand and cost information. In contrast to previous studies, we assume demand is influenced by a quality choice, and the firm has private information about its quality capacity in addition to its cost. Under natural conditions, asymmetric information about the quality capacity is irrelevant. The optimal pricing is weakly above marginal costs for all types and no type is excluded.
|Item Type:||Working or Discussion Paper (Working Paper)|
|Subjects:||H Social Sciences > HF Commerce|
|Divisions:||Faculty of Social Sciences > Economics|
|Library of Congress Subject Headings (LCSH):||Information asymmetry, Trade regulation, Quality control, Cost control|
|Series Name:||Warwick economic research papers|
|Publisher:||University of Warwick, Department of Economics|
|Place of Publication:||Coventry|
|Official Date:||24 June 2008|
|Number of Pages:||42|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
Armstrong, M., “Multiproduct Nonlinear Pricing”, Econometrica 64, 1996, 51-76.
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