Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102110
Authors: 
Choné, Philippe
Linnemer, Laurent
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 4873
Abstract: 
We study the exclusionary properties of nonlinear price-quantity schedules in an Aghion-Bolton style model with elastic demand and product differentiation. We distinguish three regimes depending on whether and how the price of the incumbent good is linked to the quantity purchased from the rival firm. We find that the supply of rival good is distorted downwards. Moreover, given the quantity supplied from the rival, the buyer may opportunistically purchase inefficiently many units from the incumbent to pocket quantity rebates. We show that the possibility for the buyer to dispose of unconsumed units attenuates the opportunism problem and limits the exclusionary effects of nonlinear pricing.
Subjects: 
inefficient exclusion
buyer opportunism
disposal costs
quantity rebates
incomplete information
JEL: 
L12
L42
D82
D86
Document Type: 
Working Paper

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