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Oligopolistic Non-Linear Pricing and Size Economies

Carlo Reggiani

Discussion Papers from Department of Economics, University of York

Abstract: The effects of non-linear pricing are determined by the relationship between the demand and the technological structure of the market. This paper focuses on a model in which firms supply a homogeneous product in two different sizes. Information about consumers' reservation prices is incomplete and the production technology is characterized by size economies. Four equilibrium regions are identified depending on the relative intensity of size economies with respect to consumers' evaluation of a second unit of the good. The desirability of non-linear pricing varies across different equilibrium regions.

Keywords: non-linear pricing; size economies; supply technology. (search for similar items in EconPapers)
JEL-codes: D43 L11 L13 (search for similar items in EconPapers)
Date: 2008-05
New Economics Papers: this item is included in nep-ind and nep-mic
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