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Too Much of a Good Thing: Quality-Differentiated Demand and Monopoly Bias

Too Much of a Good Thing: Quality-Differentiated Demand and Monopoly Bias Previous teaching notes focused on the logic and mechanics of a quality-differentiated linear demand structure. This note takes up the question of potential bias in how markets respond to quality-related aspects of consumer choice. Earlier examples demonstrated instances where monopoly interests might conflict with those of consumers in matters of quality choice. This article points to a more general propensity toward excessively high levels of quality under a monopoly market structure.JEL Classifications: D4, D41, D42 http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The American Economist SAGE

Too Much of a Good Thing: Quality-Differentiated Demand and Monopoly Bias

The American Economist , Volume 67 (1): 9 – Mar 1, 2022

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References (11)

Publisher
SAGE
Copyright
© The Author(s) 2021
ISSN
0569-4345
eISSN
2328-8123
DOI
10.1177/0569434521999988
Publisher site
See Article on Publisher Site

Abstract

Previous teaching notes focused on the logic and mechanics of a quality-differentiated linear demand structure. This note takes up the question of potential bias in how markets respond to quality-related aspects of consumer choice. Earlier examples demonstrated instances where monopoly interests might conflict with those of consumers in matters of quality choice. This article points to a more general propensity toward excessively high levels of quality under a monopoly market structure.JEL Classifications: D4, D41, D42

Journal

The American EconomistSAGE

Published: Mar 1, 2022

Keywords: quality-differentiated demand; monopoly; competition

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