Consumer Storage Confronts Monopoly Power

Venkataraman Bhaskar and Nikita Roketskiy

No 19480, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study the steady state behavior of the market for a storable good where firms have monopoly power instantaneously, but compete against future sellers. Consumers have identical preferences, but differ in their willingness to pay due to differential inventory holdings. In a steady state, the optimal nonlinear tariffs chosen by the firms induce the constant distribution of private inventories. Identical consumers behave differently, shop infrequently and consume in a cyclical manner. The ability to store goods gives rise to inefficiency, but also allows consumers to retain some surplus.

Keywords: storable good; dynamic nonlinear pricing (search for similar items in EconPapers)
JEL-codes: D11 D21 (search for similar items in EconPapers)
Date: 2024-09
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