Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5077853 | International Journal of Industrial Organization | 2015 | 7 Pages |
Abstract
We study multi-product Cournot suppliers (a monopoly is a special case) who offer menus of differentiated qualities. Under conditions that include linear and constant-elasticity demand specifications, the equilibrium price for each quality is equal to its price in a single-product Cournot market. A corollary is this: a monopolist who naively ignores the substitutability of her products, by choosing the standalone monopoly price for each quality, successfully implements the optimal discriminatory scheme. Under other reasonable specifications, the equilibrium prices are close to the single-product prices. We also evaluate the impact of minimum quality standards.
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Authors
Justin P. Johnson, David P. Myatt,