The establishment of an asking, or ceiling, price from which reductions can be bargained is a common selling practice. For a monopolist seller of a single object, this article characterizes the best such ceiling price and shows that its use is optimal among all incentive-compatible mechanisms in...

An important issue in economics is how market structure affects prices.While the standard view is that competition lowers prices, Chen andRiordan (2006) argued that with product differentiation it is notexceptional for prices to be higher under duopoly than monopoly. Thispaper empirically...

This paper analyzes the welfare effects of monopoly differential pricing in the important but largely neglected case where marginal costs of service differ across consumer groups. Compared to uniform pricing, cost-based differential pricing generally raises total welfare. Although total output...