A Pre-purchase Product Trial of a Monopolist with Multiple Products

Sunku Hahn and Song-Uk Kim

International Economic Journal, 2010, vol. 24, issue 3, 329-342

Abstract: For the heterogeneous consumers who do not know their individual utilities from a new product, a pre-purchase product trial would be helpful. We found out that a monopoly firm with two similar products would have a strong incentive not to allow a pre-purchase product trial, even though it is socially optimal to allow it. Furthermore, it is more likely for a monopoly firm with a pre-purchase product trial policy to introduce a new product to the market when introducing a new product is socially optimal.

Keywords: Monopoly; product trial; heterogeneous consumers (search for similar items in EconPapers)
Date: 2010
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DOI: 10.1080/10168737.2010.503585

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