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Monopolistic Two-Part Pricing Arrangements

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  • Richard Schmalensee

Abstract

This article is mainly concerned with Walter Oi's Disneyland problem: pricing a fixed input (admission to the park or Polaroid cameras) and a variable input (individual rides or Polaroid film) to maximize profit, though profit-constrained welfare maximization is also treated. The structure of demand in such situations is fully described when customers are either households or competitive firms. The implications of customer diversity and other market attributes for optimal policies are presented. The welfare properties of single-price and two-part tariff monopoly equilibria are compared, and potential welfare gains from tying contracts are discussed.

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Bibliographic Info

Article provided by The RAND Corporation in its journal Bell Journal of Economics.

Volume (Year): 12 (1981)
Issue (Month): 2 (Autumn)
Pages: 445-466

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Handle: RePEc:rje:bellje:v:12:y:1981:i:autumn:p:445-466

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Cited by:
  1. Gaudin, Germain & White, Alexander, 2014. "On the antitrust economics of the electronic books industry," DICE Discussion Papers 147, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  2. Burkey, Mark L., 2010. "Geographic Access and Demand in the Market for Alcohol," The Review of Regional Studies, Southern Regional Science Association, vol. 40(2), pages 159-79.
  3. Inderst, Roman & Tirosh, Gilad, 2011. "Refunds as a Metering Device," MPRA Paper 53846, University Library of Munich, Germany.
  4. Mark Lijesen, 2002. "Welfare effects of vertical integration in energy distribution," CPB Memorandum 43, CPB Netherlands Bureau for Economic Policy Analysis.
  5. Xiangkang Yin, 2000. "Two-part tariff competition in duopoly," Working Papers 2000.11, School of Economics, La Trobe University.
  6. Sara Hsu & David Kiefer, 2005. "Perfect Price Discrimination is not So Perfect," Working Paper Series, Department of Economics, University of Utah 2005_04, University of Utah, Department of Economics.

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