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Monopoly Pricing of Capacity Usage Under Asymmetric Information

Daniel F. Spulber
The Journal of Industrial Economics
Vol. 41, No. 3 (Sep., 1993), pp. 241-257
Published by: Wiley
DOI: 10.2307/2950461
Stable URL: http://www.jstor.org/stable/2950461
Page Count: 17
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Monopoly Pricing of Capacity Usage Under Asymmetric Information
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Abstract

The design of monopoly pricing strategies is examined in a general framework with an unknown population distribution of consumer characteristics and downward-sloping, multi-unit consumer demand. In addition, the monopolist has increasing marginal cost. Three pricing strategies are shown to implement the profit-maximizing allocation: reference point pricing, multi-unit competitive bidding with variable outputs, and generalized priority service. The analysis of pricing also is extended to include random capacity.

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