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A Pre-purchase Product Trial of a Monopolist with Multiple Products

Author

Listed:
  • Sunku Hahn
  • Song-Uk Kim

Abstract

For the heterogeneous consumers who do not know their individual utilities from a new product, a pre-purchase product trial would be helpful. We found out that a monopoly firm with two similar products would have a strong incentive not to allow a pre-purchase product trial, even though it is socially optimal to allow it. Furthermore, it is more likely for a monopoly firm with a pre-purchase product trial policy to introduce a new product to the market when introducing a new product is socially optimal.

Suggested Citation

  • Sunku Hahn & Song-Uk Kim, 2010. "A Pre-purchase Product Trial of a Monopolist with Multiple Products," International Economic Journal, Taylor & Francis Journals, vol. 24(3), pages 329-342.
    • Handle: RePEc:taf:intecj:v:24:y:2010:i:3:p:329-342
    DOI: 10.1080/10168737.2010.503585
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