Monopoly Pricing Strategies

Daniel Spulber

No 936, Discussion Papers from Northwestern University, Center for Mathematical Studies in Economics and Management Science

Abstract: The design of monopoly pricing strategies is examined in a general framework with an unknown population distribution of consumer characteristics, downward-sloping, multi-unit consumer demand, and increasing marginal cost Reference point pricing is introduced and is shown to implement the profit-maximizing allocation. The design of generalized priority is extended to the unknown demand setting. Nonlinear pricing is shown to be approximately optimal for the monopolist as the number of consumers gets large

Date: 1991-05
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