Product quality with heterogeneous consumers and linear pricing
journal contribution
posted on 2023-05-19, 13:10authored bySibly, H
This paper considers a linear-pricing monopolist that conducts vertical product differentiation. Previous analyses consider customers who either have unit demand or firms who conduct nonlinear pricing. In this paper, customers’ opportunity cost of time generates a demand for quality. Customers differ in either their demand, income or taste for quality. Differences in income and taste for quality are sources of vertical differentiation. The presence of quality distortion and the variety that may exhibit it are dependent on the functional form of the customer types’ demand.
History
Publication title
Australian Economic Papers
Volume
56
Issue
4
Pagination
328-351
ISSN
1467-8454
Department/School
TSBE
Publisher
Wiley-Blackwell Publishing Asia
Place of publication
United Kingdom
Rights statement
Copyright 2017 Flinders University and University of Adelaide and John Wiley & Sons Australia, Ltd.