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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.

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File URL: http://alfresco.uclouvain.be/alfresco/download/attach/workspace/SpacesStore/3a0b30f0-2d22-492d-b8f8-3f64105a160d/coredp_2000_62.pdf
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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2000062.

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Date of creation: 00 Dec 2000
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Handle: RePEc:cor:louvco:2000062

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  1. Jean Gabszewicz & Nathalie Sonnac & Xavier Wauthy, 2000. "On Price Competition with Complementary Goods," Working Papers 2000-24, Centre de Recherche en Economie et Statistique.
  2. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
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Cited by:
  1. GABSZEWICZ, Jean J. & WAUTHY, Xavier Y., . "The option of joint purchase in vertically differentiated markets," CORE Discussion Papers RP -1667, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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