Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/17999
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dc.contributor.authorMcAfee, R. Prestonen_US
dc.date.accessioned2009-01-28T15:06:01Z-
dc.date.available2009-01-28T15:06:01Z-
dc.date.issued2007en_US
dc.identifier.citation|aEconomics: The Open-Access, Open-Assessment E-Journal|v1 |h2007-1 |p1-19 |qdoi:10.5018/economics-ejournal.ja.2007-1-
dc.identifier.pidoi:10.5018/economics-ejournal.ja.2007-1-
dc.identifier.urihttp://hdl.handle.net/10419/17999-
dc.description.abstractCompanies with market power occasionally engage in intentional quality reduction of a portion of their output as a means of offering two qualities of goods for the purpose of price discrimination, even absent a cost saving. This paper provides an exact characterization in terms of marginal revenues of when such a strategy is profitable, which, remarkably, does not depend on the distribution of customer valuations, but only on the value of the damaged product relative to the undamaged product. In particular, when the damaged product provides a constant proportion of the value of the full product, selling a damaged good is unprofitable. One quality reduction produces higher profits than another if the former has higher marginal revenue than the latter.en_US
dc.language.isoengen_US
dc.publisher|aKiel Institute for the World Economy (IfW) |cKielen_US
dc.subject.jelD43en_US
dc.subject.jelL15en_US
dc.subject.ddc330en_US
dc.titlePricing Damaged Goodsen_US
dc.typeArticleen_US
dc.identifier.ppn530574411en_US
dc.rights.licensehttp://creativecommons.org/licenses/by-nc/2.0/de/deed.en-
dc.identifier.repecRePEc:zbw:ifweej:5580-

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