Too Much of a Good Thing: Quality-Differentiated Demand and Monopoly Bias

Charles F. Adams

The American Economist, 2022, vol. 67, issue 1, 123-131

Abstract: Previous teaching notes focused on the logic and mechanics of a quality-differentiated linear demand structure. This note takes up the question of potential bias in how markets respond to quality-related aspects of consumer choice. Earlier examples demonstrated instances where monopoly interests might conflict with those of consumers in matters of quality choice. This article points to a more general propensity toward excessively high levels of quality under a monopoly market structure. JEL Classifications : D4, D41, D42

Keywords: quality-differentiated demand; monopoly; competition (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:sae:amerec:v:67:y:2022:i:1:p:123-131

DOI: 10.1177/0569434521999988

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