Publicação
Ramsey pricing: a simple example of a subordinate commodity
| Resumo: | We present preferences exhibiting a so-called subordinate good, namely a commodity such that the willingness to pay for it increases when the consumption of all goods increases proportionally, and thus receives a negative price-cost margin according to Ramsey pricing. We also show that its Bertrand equilibrium price is above its Cournotian price. |
|---|---|
| Autores principais: | Bertoletti, Paolo |
| Assunto: | Subordinate commodity Negative price-cost margin Ramsey pricing Bertrand vs Cournot prices |
| Ano: | 2024 |
| País: | Portugal |
| Tipo de documento: | artigo |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade de Lisboa |
| Idioma: | inglês |
| Origem: | Repositório da Universidade de Lisboa |
| Resumo: | We present preferences exhibiting a so-called subordinate good, namely a commodity such that the willingness to pay for it increases when the consumption of all goods increases proportionally, and thus receives a negative price-cost margin according to Ramsey pricing. We also show that its Bertrand equilibrium price is above its Cournotian price. |
|---|