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Equilibrium two-part cost structures

✍ Scribed by Engelbert J. Dockner

Book ID
106274112
Publisher
Springer-Verlag
Year
2010
Tongue
English
Weight
155 KB
Volume
18
Category
Article
ISSN
1435-246X

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This paper examines the optimal two‐part pricing under cost uncertainty. We consider a risk‐averse monopolistic firm that is subject to a cost shock to its constant marginal cost of production. The firm uses two‐part pricing to sell its output to a continuum of heterogeneous consumers. We show that