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http://hdl.handle.net/2451/14282
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| Title: | Monopolists and Viscous Demand |
| Authors: | Radner, Roy
Richardson, Thomas J. |
| Issue Date: | Aug-1999 |
| Publisher: | Stern School of Business, New York University |
| Series/Report no.: | IS-99-07 |
| Abstract: | We characterize the optimal dynamic price policy of a monopolist who
faces "viscous" demand for its services. Demand is viscous if
it adjusts relatively slowly to price changes. We show that with the
optimal policy the monopolist stops short of achieving 100% market
penetration, even when all of the consumers have the same long-run
willingness to pay for the service. Furthermore, for certain parameter
values in the model, the price policy requires rapid oscillations of the
price path. |
| URI: | http://hdl.handle.net/2451/14282 |
| Appears in Collections: | IOMS: Information Systems Working Papers
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