Regulation of a Multi-product Monopolist: Effects on Pricing and Bundling
AbstractThis paper studies the effects on a multi-product monopolist's pricing and bundling decisions of a form of regulation in which a price-cap is imposed on only the basic level of service. Conditions are given under which the screening problem faced by the multi-product monopolist can be adequately represented in a one-dimensional screening model, and it is shown that this requires strong assumptions on preferences. In both a one-dimensional and a general multi-product screening model basic service price-caps may result in higher prices for some consumers even while lowering prices for other consumers. Socially suboptimal unbundling may be induced by such regulation in the general multi-product model. Copyright 1995 by Blackwell Publishing Ltd.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Journal of Industrial Economics.
Volume (Year): 43 (1995)
Issue (Month): 4 (December)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821
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- Crampes, Claude & Hollander, Abraham, 2005. "Product specification, multi-product screening and bundling: the case of pay TV," Information Economics and Policy, Elsevier, vol. 17(1), pages 35-59, January.
- Chenghuan Sean Chu, 2008. "The effect of satellite entry on product quality for cable television," Finance and Economics Discussion Series 2008-12, Board of Governors of the Federal Reserve System (U.S.).
- Claude Crampes & Abraham Hollander, 2008. "The regulation of audiovisual content: quotas and conflicting objectives," Journal of Regulatory Economics, Springer, vol. 34(3), pages 195-219, December.
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