Peak-load pricing in duopoly

Title: Peak-load pricing in duopoly
Creator: Kim, Jeong-Yoo; Lee, Myeong Ho; Berg, Nathan
Relation: Economic Modelling Vol. 57, p. 47-54
Publisher Link: http://dx.doi.org/10.1016/j.econmod.2016.04.012
Publisher: Elsevier
Resource Type: journal article
Date: 2016
Description: In this paper, we consider peak-load pricing by duopolists that maximize profit (not social welfare). We compare price levels and profits across peak-load versus uniform pricing regimes. Our main result is that the introduction of peak-load pricing can plausibly reduce prices by making price competition more severe and thereby reducing profits. This result suggests that competing firms may engage in collusion by not committing to peak-load pricing. Therefore, from the regulator's perspective, it will be desirable to encourage firms to engage in peak-load pricing to intensify competition.
Subject: peak-load pricing; congestion; Bertrand–Edgeworth model; capacity constraint
Identifier: http://hdl.handle.net/1959.13/1346220
Identifier: uon:29811
Identifier: ISSN:0264-9993
Language: eng
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