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| Author: | Gilbert, R. Klemperer, P. |
| Title: | An equilibrium theory of rationing |
| Journal: | RAND Journal of Economics
2000 : SPRING, VOL. 31:1, p. 1-21 |
| Index terms: | EQUILIBRIUM THEORY RATIONING PRICES |
| Language: | eng |
| Abstract: | Committing to prices that result in rationing may be more profitable than setting market-clearing prices if customers must make sunk investments to enter the market. Rationing is ex post inefficient, but it gives more surplus to lower-value consumers who are the marginal consumers the monopolist wants to tempt to make investments. Similarly, a monopolist may prosecure some requirements from high-cost "second sources" rather than purchase only from the lowest-cost suppliers. |
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