A Taxonomy of Monopolistic Pricing

Service providers can adjust the entrance price to the state of the demand in real life service systems where the customers' decision to receive the service, is based on this price, state of demand and other system parameters. We analyzed service provider's short and long term pricing problems in unobservable M/M/1 queues having the rational customers, where, for customers, the unit cost of waiting in the queue is higher than unit cost of waiting in the service. We showed that waiting in the queue has a clear negative effect on customers’ utilities, hence the service provider's price values. We also showed that, in the short term, monopolistic pricing is optimal for congested systems with high server utilization levels, whereas in the long term, market capturing pricing is more profitable.

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Intertemporal monopolistic pricing of non-durables

Journal of Economics ◽

10.1007/s00712-009-0069-8 ◽

2009 ◽

Vol 97 (2) ◽

pp. 97-119

Author(s):

Franz Wirl

Keyword(s):

Monopolistic Pricing

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Searching for the Concentration-Price Effect in the German Movie Theater Industry

Jahrbücher für Nationalökonomie und Statistik ◽

10.1515/jbnst-2011-0403 ◽

2011 ◽

Vol 231 (4) ◽

Author(s):

Enrico Böhme ◽

Christopher Müller

Keyword(s):

Empirical Relationship ◽

Geographic Area ◽

Price Effect ◽

Micro Data ◽

Movie Theater ◽

Significant Difference ◽

The Us ◽

Long Time ◽

Using Data ◽

Monopolistic Pricing

SummaryThe empirical relationship between market concentration and prices has been well established for a long time and for numerous industries. Recently it was confirmed for the US movie theater industry. This paper investigates, whether such a price-concentration relationship can be found on local cinema markets in Germany as well, focusing on up-to-date mainstream movies. First, we develop a model of monopolistic pricing and estimate its parameters using data of monopoly markets from a new set of German micro data. Then we apply the estimated model to simulate monopoly prices on local markets with two or more operators and compare them to the prices actually observed in these markets. We find no significant difference in admission prices, which puts our study in contrast to the results found on local US markets. Searching for an explanation, we test whether movie theater operators even though being located in the same geographic area, are local monopolists, but find no hint of that, either.

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