Price discrimination with a resource constraint

James Dana and Tomer Yahalom

Economics Letters, 2008, vol. 100, issue 3, 330-332

Abstract: Introducing an aggregate resource constraint into Mussa and Rosen's [Mussa, M., Rosen, S., 1978. Monopoly and product quality. Journal of Economic Theory 18 (2), 301-317] model of monopoly price discrimination induces an upwards distortion in product quality for high valuation consumers because the standard downward distortions in product quality for other consumers relax the resource constraint.

Date: 2008
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