Consumer strategies limiting the monopolist's power: multiple and joint purchases

Authors
Citation
I. Alger, Consumer strategies limiting the monopolist's power: multiple and joint purchases, RAND J ECON, 30(4), 1999, pp. 736-758
Citations number
11
Categorie Soggetti
Economics
Journal title
RAND JOURNAL OF ECONOMICS
ISSN journal
07416261 → ACNP
Volume
30
Issue
4
Year of publication
1999
Pages
736 - 758
Database
ISI
SICI code
0741-6261(199924)30:4<736:CSLTMP>2.0.ZU;2-S
Abstract
I characterize the menu of bundles (price-quantity combinations) offered by a monopolist when consumers can buy several bundles, share bundles with ot hers, or do beds in a two-type setting, I find that although perfect arbitr age prevents any price discrimination, partial arbitrage in the form of mul tiple or joint purchases may actually lead to more pronounced price discrim ination than when consumers ean only pick one single bundle. further, clear predictions emerge for the price pattern, contrasting with the existing li terature: with multiple purchases only, the firm offers strict quantity dis counts; with joint purchases only, discounts are infeasible.