Monopoly Profit Maximization: Success and Economic Principles

Korbinian von Blanckenburg and Milena Neubert ()
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Milena Neubert: Johannes Gutenberg-Universitaet Mainz, Germany

No 1406, Working Papers from Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz

Abstract: This paper presents a classroom experiment on pricing strategies available to monopolists. Each student makes production decisions as a monopolist during the experiment; learning from his/her own experiences what it means to be a price searcher. Full information is provided on cost conditions, while the demand function remains unknown to the participants. Given a sufficient number of periods, students will be able to maximise their profits only by applying a trial-and-error strategy. However, one of the objectives of the experiment is to demonstrate to students that search strategies based on economic principles are more efficient.

JEL-codes: A20 A23 L12 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2014-05-16, Revised 2014-11-25
New Economics Papers: this item is included in nep-exp and nep-ind
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https://download.uni-mainz.de/RePEc/pdf/Discussion_Paper_1406.pdf First version, 2014 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:jgu:wpaper:1406

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