SUSTAINABILITY IN A MULTIPRODUCT AND MULTIPLE AGENT CONTESTABLE MARKET

Vincent Iehlé

Bulletin of Economic Research, 2009, vol. 61, issue 2, 151-164

Abstract: We prove that a natural monopoly can set subsidy free pricing and sustainable pricing schedules in a general economic environment. The setting is a multiproduct and multiple agent contestable market where demands are elastic and where rivals can enter the submarkets composed by a set of the products line and a set of agents. Our results suggest that the existence results of the extant literature admit analogues even in an environment where rivals have enlarged possibilities to enter the market and where demands react to prices. The approach makes use of cooperative games to deduce the main results under conditions of fair sharing cost, a threshold in consumption and regularity of the profit function.

Date: 2009
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https://doi.org/10.1111/j.1467-8586.2009.00308.x

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Working Paper: Sustainability in a multiproduct and multiple agent contestable market (2008)
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