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Dynamic Pricing of Network Goods with Boundedly Rational Consumers

Radner, Roy; Sundararajan, Arun; Radunskaya, Ami - 2010

We present a model of dynamic monopoly pricing for a good that displays network effects. In contrast with the standard notion of a rational-expectations equilibrium, we model consumers as boundedly rational, and unable either to pay immediate attention to each price change, or to make accurate...

Persistent link: https://www.econbiz.de/10014027236

Anticipating a Price Freeze or How Not to Be Caught With Your Prices Down

Von zur Mühlen, Peter - 2022

This paper studies how and why announcing and maintaining a price freeze, such as implemented between 1971 and 1973, can backfire. The vehicle for this analysis is a monopolistic firm that is shown to reduce output and raise price in anticipation of a price freeze, depending on the length of the...

Persistent link: https://www.econbiz.de/10013403839

Aggregating the single crossing property: theory and applications to comparative statics and Bayesian games

Quah, John; Strulovici, Bruno - Department of Economics, Oxford University - 2010

The single crossing property plays a crucial role in monotone comparative statics (Milgrom and Shannon (1994)), yet in some important applications the property cannot be directly assumed or easily derived. Difficulties often arise because the property cannot be aggregated: the sum of two...

Persistent link: https://www.econbiz.de/10008494398

The Anatomy of Market Power in Electricity Markets with Hydropower as Dominating Technology

Førsund, Finn R. - International Centre for Economic Research (ICER) - 2006

The problem of optimal management of a water reservoir by a hydropower producer is necessarily a dynamic one since water can be transferred between periods. A hydropower producer being a monopolist cannot reduce output in the classical way without spilling water. He will follow a strategy of...

Persistent link: https://www.econbiz.de/10004972536

Optimal Mechanism for Selling Substitutes

Pavlov, Gregory - Department of Economics, Boston University - 2006

We study a problem of a multiproduct monopolist selling substitutable goods to a buyer with unknown valuations. Under the standard distributional assumptions we find that in the optimal menu every nontrivial contract delivers some good with certainty. Using this result we apply control-theoretic...

Persistent link: https://www.econbiz.de/10004972915

Capitalizing R&D Expenditures

Diewert, Erwin; Huang, Ning - Vancouver School of Economics - 2008

The next international version of the System of National Accounts will recommend that R&D (Research and Development) expenditures be capitalized instead of being immediately expensed as in the present System of National Accounts 1993. An R&D project creates a new technology, which in principle...

Persistent link: https://www.econbiz.de/10004977061

Designing a Performance Indicator to Economize on Monopoly Subsidy

Benchekroun, Hassan; Long, Ngo Van - Centre Interuniversitaire de Recherche en Analyse des … - 2004

We provide a continuum of subsidy rules based on a performance indicator that induce a monopoly to choose the socially optimal production level. These subsidy rules result in a reduction of the amount of subsidy paid to the monopolist compared to the standard case where a constant subsidy rate...

Persistent link: https://www.econbiz.de/10005100733

Dynamic Duopoly with Congestion Effects

Laussel, Didier; Montmarin, Maxime de; Long, Ngo Van - Centre Interuniversitaire de Recherche en Analyse des … - 2004

We analyze duopolistic competition between horizontally differentiated firms selling durable goods or services subject to congestion. At each point of time, new customers buy one unit of the commodity from one of the firms, by comparing present prices and future congestion rates. We study the...

Persistent link: https://www.econbiz.de/10005101114

Investment in a Monopoly with Bayesian Learning

Koulovatianos, Christos; Mirman, Leonard J.; Santugini, Marc - University of Vienna, Department of Economics - 2006

We study how learning affects an uninformed monopolist?s supply and investment decisions under multiplicative … random demand. Observing prices reveals this information slowly. We Þrst show how to incorporate Bayesian learning into … closed- form solutions for the optimal supply and investment decisions. This enables us to study the effect of learning on …

Persistent link: https://www.econbiz.de/10005463505

A CLASS OF PERFORMANCE-BASED SUBSIDY RULES

Benchekroun, Hassan; Long, Ngo Van - Department of Economics, McGill University - 2007

We consider a benchmark static incentive scheme, i.e. a per unit subsidy, that induces a monopoly to produce a target output level. We show that the same output level can be achieved by a continuum of dynamic subsidy rules based on a performance indicator. The subsidy rules require only local...

Persistent link: https://www.econbiz.de/10005536824