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Mathematical Miscalculations and Monopoly Pricing Strategies


  • Bryan C McCannon

    () (Wake Forest University, Department of Economics, 123 Carswell Hall, Box 7505, Winston-Salem, NC 27109, USA.)


Economic models focus on prices that announce a cost for one unit. Often prices assigning a cost for multiple units are chosen. For either, any quantity can be purchased at a constant per unit price. I incorporate the experimental phenomenon of mathematical miscalculations to explain the use of both linear pricing strategies. When calculating the per unit price, an error may lead a consumer to either purchase mistakenly or not purchase a unit when she should. These two consequences distinguish the two. Furthermore, I show that announcing a price for multiple units, in certain environments, outperforms non-linear prices. Eastern Economic Journal (2009) 35, 248–262. doi:10.1057/eej.2008.18

Suggested Citation

  • Bryan C McCannon, 2009. "Mathematical Miscalculations and Monopoly Pricing Strategies," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 35(2), pages 248-263.
  • Handle: RePEc:pal:easeco:v:35:y:2009:i:2:p:248-263

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