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PRICE AND QUALITY REGULATION WITH MULTI-DIMENSIONAL HETEROGENEITY
Category: Economic Theory
Price Discrimination Sunday 25th August 2002, 09:30 - 11:00, Room: 5.8
Session Chair(s):
James Bergin, City University, HONG KONG
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Abstract:
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Regulation theory consider commodities with different quality as different goods. However, in many monopolistic industries, services cannot be offered at distinct quality level. The standard regulatory toolbox cannot be applied. In this paper, we display the choices of a monopolist facing an heterogeneous population when vertical differentiation is too costly. Optimal tariffs and quality level are computed in the same context. Finally we exhibit a mechanism to implement the later solution. An application is drawn in the transportation sector with a population that is heterogeneous in the valuation of both the good and its quality, i.e. its value of time.
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Find this file in the \Papers\1393\ folder of this CD-ROM.
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