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Another perverse effect of monopoly power

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  • GABSZEWICZ, Jean
  • WAUTHY, Xavier

Abstract

We show that the simple fact that a monopolist sells a good in units which are indivisible may well induce him to select a quality for his product which is not the highest one, even if no cost of any sort is attached to quality improvement.

Suggested Citation

  • GABSZEWICZ, Jean & WAUTHY, Xavier, 2000. "Another perverse effect of monopoly power," LIDAM Discussion Papers CORE 2000062, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2000062
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp2000.html
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    References listed on IDEAS

    as
    1. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    2. Gabszewicz, Jean & Sonnac, Nathalie & Wauthy, Xavier, 2001. "On price competition with complementary goods," Economics Letters, Elsevier, vol. 70(3), pages 431-437, March.
    3. Gabszewicz, Jean Jaskold, 1983. "Blue and Red Cars, or Blue Cars Only? A Note on Product Variety," Economica, London School of Economics and Political Science, vol. 50(198), pages 203-206, May.
    4. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
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    Cited by:

    1. Jean J. Gabszewicz & Xavier Y. Wauthy, 2003. "The option of joint purchase in vertically differentiated markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 22(4), pages 817-829, November.

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