Publication
Title
Optimal monopoly market area spanning in multidimensional commodity spaces
Author
Abstract
A monopoly firm locates in multidimensional product characteristics space by setting a price that maximizes its profits. The monopoly market area (MMA) it serves strikes the happy medium between lower price and larger MMA, assuming absence of price discrimination, by setting the price at the MMA margins. The MMA takes different shapes, such as hyperspheres or hypercubes, depending on how customers perceive the product distance from their ideal tastes. Commodity space dimensionality, a measure of customer taste elaboration, has a robust effect on optimization: the optimal MMA stretch increases and price decreases with dimensionality, with different customer sensitivity patterns in place.
Language
English
Source (journal)
Managerial and decision economics. - London
Publication
London : 2009
ISSN
0143-6570
Volume/pages
30(2009), p. 1-14
Full text (Publisher's DOI)
UAntwerpen
Faculty/Department
Research group
Publication type
Subject
Affiliation
Publications with a UAntwerp address
External links
VABB-SHW
Record
Identification
Creation 09.03.2009
Last edited 22.11.2016
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