The properties of product line prices

Justin P. Johnson and David Myatt

International Journal of Industrial Organization, 2015, vol. 43, issue C, 182-188

Abstract: We study multi-product Cournot suppliers (a monopoly is a special case) who offer menus of differentiated qualities. Under conditions that include linear and constant-elasticity demand specifications, the equilibrium price for each quality is equal to its price in a single-product Cournot market. A corollary is this: a monopolist who naively ignores the substitutability of her products, by choosing the standalone monopoly price for each quality, successfully implements the optimal discriminatory scheme. Under other reasonable specifications, the equilibrium prices are close to the single-product prices. We also evaluate the impact of minimum quality standards.

Keywords: Product lines; Price discrimination; Multi-product competition (search for similar items in EconPapers)
JEL-codes: D42 D43 L11 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167718715000648
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:43:y:2015:i:c:p:182-188

DOI: 10.1016/j.ijindorg.2015.05.006

Access Statistics for this article

International Journal of Industrial Organization is currently edited by P. Bajari, B. Caillaud and N. Gandal

More articles in International Journal of Industrial Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().