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A new contribution to the 'Paris Metro Pricing' proposal

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  • Maxime de Marin de Montmarin

Abstract

Using the concept of the 'Paris Metro Pricing', we will show that, when the distribution of the capacity between sub-networks leads to any loss of technical effectiveness and when a traditional condition on the 'hazard rate' is checked, it is always optimal for the monopolist to subdivide his main network in as many sub-networks as there are different types of net surfers.

Suggested Citation

  • Maxime de Marin de Montmarin, 2007. "A new contribution to the 'Paris Metro Pricing' proposal," Applied Economics, Taylor & Francis Journals, vol. 39(13), pages 1609-1612.
    • Handle: RePEc:taf:applec:v:39:y:2007:i:13:p:1609-1612
    DOI: 10.1080/00036840600690173
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    References listed on IDEAS

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    1. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    2. Chander, Parkash & Leruth, Luc, 1989. "The optimal product mix for a monopolist in the presence of congestion effects : A model and some results," International Journal of Industrial Organization, Elsevier, vol. 7(4), pages 437-449, December.
    3. Gary Madden & Grant Coble-Neal & Scott Savage, 2004. "United States internet penetration," Applied Economics Letters, Taylor & Francis Journals, vol. 11(9), pages 529-532.
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