Consumer Strategies Limiting the Monopolist's Power: Multiple and Joint Purchases

Posted: 18 Oct 1999

See all articles by Ingela Alger

Ingela Alger

University of Toulouse 1 - Toulouse School of Economics (TSE); CNRS UMR 5314 TSE-R; Institute for Advanced Study in Toulouse

Abstract

I characterize the menu of bundles (price-quantity combinations) offered by a monopolist when consumers can buy several bundles, share bundles with others, or do both, in a two-type setting. I find that although perfect arbitrage prevents any price discrimination, partial arbitrage in the form of multiple or joint purchases may actually lead to more pronounced price discrimination than when consumers can only pick one single bundle. Further, clear predictions emerge for the price pattern, contrasting with the existing literature: with multiple purchases only, the firm offers strict quantity discounts; with joint purchase only, discounts are infeasible.

JEL Classification: D42, L12

Suggested Citation

Alger, Ingela, Consumer Strategies Limiting the Monopolist's Power: Multiple and Joint Purchases. Available at SSRN: https://ssrn.com/abstract=182360

Ingela Alger (Contact Author)

University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )

Place Anatole-France
Toulouse Cedex, F-31042
France

CNRS UMR 5314 TSE-R ( email )

France

Institute for Advanced Study in Toulouse ( email )

31015 Toulouse, Cedex 6
France

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