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Author Info
Babu Nahata (Department of Economics, University of Louisville)
Serguei Kokovin (Department of Economics, Novosibirsk State University)
Evgeny Zhelobodko (Department of Economics, Novosibirsk State University)

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Abstract

We analyze nonlinear pricing problem under monopoly using two hidden types of agents with linear demands and fully characterize all possible optimal solutions for both ordered and non-ordered demands. We show that both optimal packages can either contain Pareto-efficient quantities or one package can be undersized or oversized. All these effects are non- degenerate and are expected to hold for nonlinear demands. Surprisingly, the total output under nonlinear price discrimination with self- selection is neither unambigously realted to efficiency nor to the degree of monopoly power (demand elasticity). We also show that under limited range of parameters quantity premia can occur only when demands are ordered.

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File URL: http://129.3.20.41/eps/get/papers/0307/0307002.pdf
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Publisher Info
Paper provided by EconWPA in its series General Economics and Teaching with number 0307002.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 35 pages
Date of creation: 03 Jul 2003
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Handle: RePEc:wpa:wuwpgt:0307002

Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on HP/PostScript/; pages: 35
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Web page: http://129.3.20.41

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Related research
Keywords: Principal-agent; self-selection; nonlinear pricing; package pricing; Pareto efficiency;

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Find related papers by JEL classification:
D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

References listed on IDEAS
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.:

  1. Katz, Michael L, 1983. "Non-Uniform Pricing, Output and Welfare under Monopoly," Review of Economic Studies, Blackwell Publishing, vol. 50(1), pages 37-56, January. [Downloadable!] (restricted)
  2. Katz, Michael L, 1984. "Nonuniform Pricing with Unobservable Numbers of Purchases," Review of Economic Studies, Blackwell Publishing, vol. 51(3), pages 461-70, July. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Babu Nahata & Serguei Kokovin & Evgeny Zhelobodko, 2003. "Self-Selection Under Non-Ordered Valuations: Type-Splitting, Envy-Cycles, Rationing And Efficiency," General Economics and Teaching 0307001, EconWPA. [Downloadable!]
  2. Babu Nahata & Serguei Kokovin & Evgeny Zhelobodko, 2003. "Informational Structure and Effciency in Monopoly," General Economics and Teaching 0307004, EconWPA. [Downloadable!]
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This page was last updated on 2009-11-13.

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