The Pro-Competitive Effect of Two-Part Tariffs
AbstractTwo producers delegate sales of differentiated products to common retailers, each with a monopoly position. Each producer can offer either a linear or a two-part tariff. In the single period game each producer's dominant strategy is to use a two-part tariff. If the two producers' products are sufficiently close substitutes and the discount factor is sufficiently high, both producers offering linear tariffs can be sustained as an equilibrium outcome in an infinitely repeated game.
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Bibliographic InfoPaper provided by Department of Economics, University of Bergen in its series Norway; Department of Economics, University of Bergen with number 175.
Length: 12 pages
Date of creation: 1998
Date of revision:
Contact details of provider:
Postal: Department of Economics, University of Bergen Fosswinckels Gate 6. N-5007 Bergen, Norway
Web page: http://www.uib.no/econ/
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PRICING ; GAMES;
Other versions of this item:
- Tommy Staahl Gabriel & Lars Sorgard, 1998. "The Pro-competitive Effect of Two-Part Tariffs," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 5(1), pages 47-55.
- L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
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