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Rationing as a Signal


  • Jeong-Yoo Kim

    (Department of Economics, University at Albany, SUNY, U.S.A. and Department of Economics, Dongguk University, South Korea)


Two consumers sequentially purchase at most one unit of some homogeneous good from a monopolist who knows the state of nature, either high or low. I characterize a rationing equilibrium at which the high-type monopolist produces only one unit and rations customers, whereas the low-type monopolist serves customers by producing two units.

Suggested Citation

  • Jeong-Yoo Kim, 2002. "Rationing as a Signal," International Journal of Business and Economics, College of Business and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 1(2), pages 115-122, August.
  • Handle: RePEc:ijb:journl:v:1:y:2002:i:2:p:115-122

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    References listed on IDEAS

    1. Becker, Gary S, 1991. "A Note on Restaurant Pricing and Other Examples of Social Influences on Price," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1109-1116, October.
    2. Vincenzo Denicolo' & Paolo Garella, 1999. "Rationing in a Durable Goods Monopoly," RAND Journal of Economics, The RAND Corporation, vol. 30(1), pages 44-55, Spring.
    3. Patrick DeGraba, 1995. "Buying Frenzies and Seller-Induced Excess Demand," RAND Journal of Economics, The RAND Corporation, vol. 26(2), pages 331-342, Summer.
    4. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
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    More about this item


    rationing; quality; signals; sequential purchases;

    JEL classification:

    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality


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