Published September 6, 2017
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The Optimal Product-Mix for a Monopolist in the Presence of Congestion Effect: A Model and Some Results
- Creators
- Chander, Parkash
- Leruth, Luc
Abstract
The paper develops a model of product differentiation in which the quality of a product may be negatively affected by the number of consumers buying it, as it is the case for any good affected by congestion. It is shown that for any positive degree of heterogeneity among the consumers, a monopolist will always find it more profitable to differentiate, i.e., to sell more than one quality of the product at different prices.
Additional Information
We thank P. Dubey and J. Sutton for their comments on an earlier draft of this paper. We also thank Victor Gins burgh for helpful discussion. Financial support by "Project d' Action Concertéo" under contract no. 84-89/65 is gratefully acknowledged by the second author. Published as Chander, Parkash, and Luc Leruth. "The optimal product mix for a monopolist in the presence of congestion effects: A model and some results." International Journal of Industrial Organization 7, no. 4 (1989): 437-449.Attached Files
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Additional details
- Eprint ID
- 81209
- Resolver ID
- CaltechAUTHORS:20170906-144753357
- Created
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2017-09-06Created from EPrint's datestamp field
- Updated
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2019-10-03Created from EPrint's last_modified field
- Caltech groups
- Social Science Working Papers
- Series Name
- Social Science Working Paper
- Series Volume or Issue Number
- 673