Two-part tariff competition in duopoly

Xiangkang Yin

No 2000.11, Working Papers from School of Economics, La Trobe University

Abstract: Built on the location model, this paper studies the rivalry of two firms in an industry through two-part tariffs. It is found that kinky profit functions are responsible for the coincidence of imperfectly competitive equilibrium and cartelization outcome. A duopoly likely results in higher entry fees and industry profits and lower net consumers surplus than a monopoly because each duopolist has a smaller market size than the monopolist. But social welfare in the monopoly is lower than in the duopoly. In comparison with uniform pricing, two-part tariffs tend to have lower prices, more profits and welfare but the magnitude of net consumers surplus is ambiguous.

Keywords: Monopoly, Oligopoly, Two-Part Tariff, Cartelization, COMPETITION; ECONOMIC MODELS (search for similar items in EconPapers)
JEL-codes: D21 D42 D43 L11 L12 L13 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2000
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Two-part tariff competition in duopoly (2004)
Working Paper: Two-part tariff competition in duopoly (2000)
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