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dc.contributor.authorJensen, Sissel
dc.contributor.authorSørgard, Lars
dc.date.accessioned2006-06-21T09:53:33Z
dc.date.available2006-06-21T09:53:33Z
dc.date.issued2005-04
dc.identifier.issn1503-2140
dc.identifier.urihttp://hdl.handle.net/11250/165472
dc.description.abstractWe analyze two-part tariffs in an oligopoly, where each firm commits to a quantity and a fixed fee prior to the determination of unit prices. In the case of homogeneous consumers, Harrison and Kline (2001) showed that the equilibrium involves marginal cost pricing and that increased competition affects industry profit and the tariff structure solely by reducing the fixed fee. We show that firms` pricing strategies may change when we allow for demand side heterogeneity. In particular, we find that the price per unit can be either above or below marginal cost, and that the fixed fee increases with increased competition. Finally, some numerical examples show that full market coverage may arise as an equilibrium feature in cases where a monopolist would exclude low-demand types. Hence, fostering competition may contribute to the fulfillment of the Universal Service requirement that is common in industries such as telecommunications, which applies nonlinear pricing on a normal basisen
dc.format.extent331686 bytes
dc.format.mimetypeapplication/pdf
dc.language.isoengen
dc.publisherSNFen
dc.relation.ispartofseriesWorking paperen
dc.relation.ispartofseries2005:26en
dc.subjectoligopolyen
dc.subjecttwo-part tariffen
dc.subjectCournoten
dc.titleTwo-part pricing, consumer heterogeneity and cournot competitionen
dc.typeWorking paperen


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