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Product quality with heterogeneous consumers and linear pricing

journal contribution
posted on 2023-05-19, 13:10 authored by Sibly, 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.

Repository Status

  • Restricted

Socio-economic Objectives

Market-based mechanisms

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