nep-ind New Economics Papers
on Industrial Organization
Issue of 2009‒03‒28
three papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Pricing in networks By Francis Bloch; Nicolas Quérou
  2. The Impact of Price Discrimination on Revenue: Evidence from the Concert Industry By Pascal Courty; Mario Pagliero
  3. Spatial asymmetric duopoly with an application to Brussels' airports By Fay Dunkerley; André De Palma; Stef Proost

  1. By: Francis Bloch (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Nicolas Quérou (School of Management and Economics - Queen's University of Belfast)
    Abstract: This paper studies optimal pricing in networks in the presence of local consumption or price externalities. It analyzes the relation between prices and nodal centrality measures. Using an asymptotic approach, it shows that the ranking of optimal prices and strategies can be reduced to the lexicographic ranking of a specific vector of nodal characteristics. In particular, this result shows that with positive consumption externalities, prices are higher at nodes with higher degree, and with relative price externalities, prices are higher at nodes which have more neighbors of smaller degree.
    Keywords: Social Networks, Network Externalities, Oligopolies
    Date: 2008–10
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00356356_v1&r=ind
  2. By: Pascal Courty; Mario Pagliero
    Abstract: Concert tickets can either be sold at a single price or at multiple prices corresponding to different seating categories. We study the relationship between price discrimination and revenue by examining variations in the number of seating categories across concert, tour, artist, location, and time. Offering multiple seating categories leads to revenues that are approximately 5 percent higher than with single price ticketing. The return to price discrimination is higher in markets with more heterogeneous demand, in smaller venues and in more competitive markets. The return of increasing from three to four categories of seating is about half that of increasing from one to two.
    Keywords: Price discrimination, return to price discrimination, second degree price discrimination
    JEL: D42 L82 Z11
    Date: 2009
    URL: http://d.repec.org/n?u=RePEc:cca:wpaper:105&r=ind
  3. By: Fay Dunkerley (CES - KU Leuven - CES - KU Leuven); André De Palma (ENS Cachan - Ecole Normale Supérieure de Cachan - Ecole Normale Supérieure de Cachan, Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Stef Proost (CES - KU Leuven - CES - KU Leuven)
    Abstract: In this paper the problem of a city with access to two firms or facilities (shopping malls, airports, commercial districts) selling a differentiated product (shopping, flights) and/or offering a differentiated workplace is studied. Transport connections to one facility are congested. A model is presented for this asymmetric duopoly game that can be solved for a Nash equilibrium in prices and wages. A comparative statics analysis is used to illustrate the properties of the equilibrium. A numerical model is then applied to the two Brussels airports. Three stylised policies are implemented to address the congestion problem: expansion of transport capacity; congestion pricing; and a direct subsidy to the uncongested facility. Our results indicate that the degree of intrinsic differentiation between the two firms is crucial in determining the difference in profit and market share. Price and wage differences also depend on trip frequency and consumer preferences for diversity. Congestion pricing is the most effective policy tool but all three options are shown to have attractive attributes.
    Keywords: duopoly, imperfect competition, congestion, general equilibrium, airport competition
    Date: 2008–12
    URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00348443_v1&r=ind

This nep-ind issue is ©2009 by Kwang Soo Cheong. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at http://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.