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On the uniqueness of optimal prices set by monopolistic sellers

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  • van den Berg, Gerard J.

Abstract

This paper considers price determination by monopolistic sellers who know the distribution of valuations among the potential buyers. We derive a novel condition under which the optimal price set by the monopolist is unique. In many settings, this condition is easy to interpret, and it is valid for a very wide range of distributions of valuations. The results carry over to the optimal minimum price in independent private value auctions. In addition, they can be fruitfully applied in the analysis of quantity discount price policies.
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Suggested Citation

  • van den Berg, Gerard J., 2007. "On the uniqueness of optimal prices set by monopolistic sellers," Journal of Econometrics, Elsevier, vol. 141(2), pages 482-491, December.
  • Handle: RePEc:eee:econom:v:141:y:2007:i:2:p:482-491
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    1. Armstrong, Mark, 1996. "Multiproduct Nonlinear Pricing," Econometrica, Econometric Society, vol. 64(1), pages 51-75, January.
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    Citations

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    Cited by:

    1. Tarasov, Alexander, 2009. "Consumer Preferences in Monopolistic Competition Models," MPRA Paper 19990, University Library of Munich, Germany.
    2. Gerard J. van den Berg & Bas van der Klaauw, 2007. "If Winning isn't Everything, why do they keep Score? A Structural Empirical Analysis of Dutch Flower Auctions," Tinbergen Institute Discussion Papers 07-041/3, Tinbergen Institute.
    3. Christian Ewerhart, 2013. "Regular type distributions in mechanism design and $$\rho $$ -concavity," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 53(3), pages 591-603, August.
    4. Ivanov, Maxim, 2009. "Niche market or mass market?," Economics Letters, Elsevier, vol. 105(3), pages 217-220, December.
    5. Alexander Tarasov, 2014. "Preferences and income effects in monopolistic competition models," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 42(3), pages 647-669, March.
    6. repec:spr:annopr:v:257:y:2017:i:1:d:10.1007_s10479-015-1817-5 is not listed on IDEAS
    7. Jobjörnsson, Sebastian & Forster, Martin & Pertile, Paolo & Burman, Carl-Fredrik, 2016. "Late-stage pharmaceutical R&D and pricing policies under two-stage regulation," Journal of Health Economics, Elsevier, vol. 50(C), pages 298-311.

    More about this item

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts

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