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Product quality with heterogeneous consumers and linear pricing


Sibly, H, Product quality with heterogeneous consumers and linear pricing, Australian Economic Papers, 56, (4) pp. 328-351. ISSN 1467-8454 (2017) [Refereed Article]

Copyright Statement

Copyright 2017 Flinders University and University of Adelaide and John Wiley & Sons Australia, Ltd.

DOI: doi:10.1111/1467-8454.12105


This paper considers a linear-pricing monopolist that conducts vertical product differentiation. Previous analyses consider customers who either have unit demand or firms who conduct nonlinear pricing. In this paper, customers’ opportunity cost of time generates a demand for quality. Customers differ in either their demand, income or taste for quality. Differences in income and taste for quality are sources of vertical differentiation. The presence of quality distortion and the variety that may exhibit it are dependent on the functional form of the customer types’ demand.

Item Details

Item Type:Refereed Article
Keywords:linear pricing, customers
Research Division:Economics
Research Group:Economic theory
Research Field:Economic theory not elsewhere classified
Objective Division:Economic Framework
Objective Group:Microeconomics
Objective Field:Market-based mechanisms
UTAS Author:Sibly, H (Dr Hugh Sibly)
ID Code:122186
Year Published:2017
Deposited By:TSBE
Deposited On:2017-11-03
Last Modified:2018-07-13

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