Sustainability in a multiproduct and multiple agent contestable market
AbstractWe prove that a natural monopoly can set subsidy free pricing and sustainable pricing schedules in general economic environment. The setting is a multiproduct and multiple agent contestable market where demands are elastic and where rivals can enter the sub-markets composed by a set of the products line and a set of agents. Our results suggest that the existence results of the extant literature admit analogues even in an environment where rivals have enlarged possibilities to enter the market and where demands react to prices. The approach makes use of cooperative games to deduce the main results under conditions of fair sharing cost, threshold in the consumption and regularity of the profit function.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 13013.
Date of creation: 01 Oct 2008
Date of revision:
cooperative game; existence result; natural monopoly; subsidy free pricing; sustainability;
Other versions of this item:
- Vincent Iehlé, 2009. "Sustainability In A Multiproduct And Multiple Agent Contestable Market," Bulletin of Economic Research, Wiley Blackwell, vol. 61(2), pages 151-164, 04.
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-31 (All new papers)
- NEP-COM-2009-01-31 (Industrial Competition)
- NEP-MIC-2009-01-31 (Microeconomics)
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