The Discriminating Beta: Prices and Capacity with Correlated Demands.

Uniform customer-class pricing can do much of the work of congestion-based or time-of-day pricing in communication or wireless networks. A monopolist exploits differences in the stochastic characteristics of demands. If demands are correlated and the firm faces a capacity constraint, then it can set...

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Publicado en:Southern Economic Journal Vol. 81; no. 1; pp. 56 - 68
Autores principales: Eckel, Catherine C., Smith, William T.
Formato: Artículo
Publicado: Wiley-Blackwell Jul2014
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Acceso en línea:Ver este registro en EBSCOhost
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        atl: The Discriminating Beta: Prices and Capacity with Correlated Demands.
      aug:
        au:
          Eckel, Catherine C.
          Smith, William T.
        affil:
          Department of Economics, TAMU 4228, Texas A&M University, College Station, TX 77845, USA
          Department of Economics, Fogelman College of Business & Economics, University of Memphis, Memphis, TN 38152, USA
      su:
        Monopolies
        Wireless communications
        Securities trading
        Quality of service
        Price discrimination
        Profitability
      sug:
        subj:
          Monopolies
          Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing
          Wireless Telecommunications Carriers (except Satellite)
          Investment Banking and Securities Dealing
          Securities Brokerage
          Wireless communications
          Securities trading
          Quality of service
          Price discrimination
          Profitability
      ab: Uniform customer-class pricing can do much of the work of congestion-based or time-of-day pricing in communication or wireless networks. A monopolist exploits differences in the stochastic characteristics of demands. If demands are correlated and the firm faces a capacity constraint, then it can set prices to reduce the variability of aggregate demand, thereby reducing the probability of excess demand and the associated service quality deterioration. Demands that covary negatively with aggregate demand are valuable to the firm in much the same way that securities that covary negatively with the market are valuable in a stock portfolio Customer classes that exhibit low covariance with aggregate demand realize lower optimal prices. Optimal capacity is also affected by these covariances. As long as demands are not perfectly positively correlated, expected costs of joint production are less than expected costs of serving demands separately.
      pubtype: Academic Journal
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    language: English
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