Nonlinear pricing in spatial oligopoly
AbstractA model of duopoly competition in nonlinear pricing when firms are imperfectly informed about consumer locations is analyzed. A continuum of consumers purchase a variable amount of a product from one of two firms located at the endpoints of the market. At the Nash equilibrium in quantity-outlay schedules, consumers buy the same quantities as they would from the same firm if it were a monopolist facing the same informational asymmetries, but they receive greater surplus. Hence, no efficiency gains result from competition. If consumers have the option to reveal their locations and have the firms deliver the goods, all consumers choose to reveal their locations in equilibrium. Thus, the inefficiencies from information asymmetries may not arise because firms can deliver the good to consumers. In contrast, with a monopoly seller, consumers have no incentives to reveal their locations.
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Bibliographic InfoArticle provided by Springer in its journal Economic Design.
Volume (Year): 2 (1996)
Issue (Month): 1 (December)
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Web page: http://link.springer.de/link/service/journals/10058/index.htm
Other versions of this item:
- HAMILTON , Jonathan & THISSE , Jacques-François, 1996. "Nonlinear pricing in spatial oligopoly," CORE Discussion Papers 1996066, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Hamilton , J. H. & Thisse, J.- F., . "Nonlinear pricing in spatial oligopoly," CORE Discussion Papers RP -1266, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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