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Monopoly Pricing of Capacity Usage under Asymmetric Information

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  • Spulber, Daniel F

Abstract

The design of monopoly pricing strategies is examined in a general framework with an unknown population distribution of consumer characteristics and downward-sloping, multi-unit consumer demand. In addition, the monopolist has increasing marginal cost. Three pricing strategies are shown to implement the profit-maximizing allocation: reference point pricing, multi-unit competitive bidding with variable outputs, and generalized priority service. The analysis of pricing also is extended to include random capacity. Copyright 1993 by Blackwell Publishing Ltd.

Suggested Citation

  • Spulber, Daniel F, 1993. "Monopoly Pricing of Capacity Usage under Asymmetric Information," Journal of Industrial Economics, Wiley Blackwell, vol. 41(3), pages 241-257, September.
  • Handle: RePEc:bla:jindec:v:41:y:1993:i:3:p:241-57
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    Cited by:

    1. Erica L. Plambeck & Terry A. Taylor, 2005. "Sell the Plant? The Impact of Contract Manufacturing on Innovation, Capacity, and Profitability," Management Science, INFORMS, vol. 51(1), pages 133-150, January.
    2. Isamu Matsukawa, 2009. "Regulatory effects on the market penetration and capacity of reliability differentiated service," Journal of Regulatory Economics, Springer, vol. 36(2), pages 199-217, October.
    3. Matsukawa, Isamu, 2006. "Regulating a Monopoly Offering Priority Service," MPRA Paper 991, University Library of Munich, Germany.
    4. Basu, Sumanta & Chakraborty, Soumyakanti & Sharma, Megha, 2015. "Pricing cloud services—the impact of broadband quality," Omega, Elsevier, vol. 50(C), pages 96-114.
    5. Sreekumar Bhaskaran & Karthik Ramachandran & John Semple, 2010. "A Dynamic Inventory Model with the Right of Refusal," Management Science, INFORMS, vol. 56(12), pages 2265-2281, December.

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