Too Much of a Good Thing: Quality-Differentiated Demand and Monopoly Bias

2021 ◽  
pp. 056943452199998
Author(s):  
Charles F. Adams
Keyword(s):  
Market Structure ◽  
Consumer Choice ◽  
Good Thing ◽  
Potential Bias ◽  
Demand Structure ◽  
Monopoly Market ◽  
Linear Demand ◽  
Quality Choice ◽  
Jel Classifications

Previous teaching notes focused on the logic and mechanics of a quality-differentiated linear demand structure. This note takes up the question of potential bias in how markets respond to quality-related aspects of consumer choice. Earlier examples demonstrated instances where monopoly interests might conflict with those of consumers in matters of quality choice. This article points to a more general propensity toward excessively high levels of quality under a monopoly market structure. JEL Classifications: D4, D41, D42

Quality-Differentiated Demand and the Analytics of Disruption

2020 ◽  
pp. 056943452097085 ◽  
Author(s):  
Charles F. Adams
Keyword(s):  
Consumer Choice ◽  
Market Responses ◽  
Market Disruption ◽  
Jel Classifications

The article builds on and extends two earlier teaching notes on the enhancement of undergraduate microeconomics to encompass quality considerations in consumer choice and market responses to those preferences. This enhanced framework is then applied to an analysis of market disruption, providing a credible and accessible path for predicting threats to higher end industry leaders from lower end competitors. JEL Classifications: D0, D2, D4

A Bayesian approach to the spatial representation of market structure from consumer choice data

1998 ◽  
Vol 111 (2) ◽  
pp. 285-305 ◽  
Author(s):  
Wayne S. DeSarbo ◽  
Youngchan Kim ◽  
Michel Wedel ◽  
Duncan K.H. Fong
Keyword(s):  
Market Structure ◽  
Bayesian Approach ◽  
Consumer Choice ◽  
Spatial Representation ◽  
Choice Data

scholarly journals Analysis of Islamic Banking Market Structure in Indonesia with Panzar-Rosse Model Approach

2019 ◽  
Vol 2 (2) ◽  
pp. 122-133
Author(s):  
Kiki Hardiansyah Siregar ◽  
Ahmad Qarib ◽  
Dede Ruslan
Keyword(s):  
Panel Data ◽  
Market Structure ◽  
Banking Industry ◽  
Secondary Data ◽  
Islamic Banking ◽  
Analysis Model ◽  
Banking Market ◽  
Monopoly Market ◽  
Equilibrium Test

The purpose in this study is to determine and analyze the market structure of the Islamic banking industry in Indonesia according to the Panzar-Rosse model and the level of competition between Islamic banking industry in Indonesia. To find out the market structure of the islamic banking industry it must be analyzed the effect of EAR, NPF, BOPO, FAR, FS, PL, PFF, PCE on the performance of Islamic banking as measured by ROA. The data used to answer and achieve these objectives is used secondary data from Islamic banks in Indonesia which has the largest asset ratings for a period of 6 years using the selected panel data method on the basis of Tests. The analysis model related to market structure uses the Panzar-Rosse model by looking for the H-statistic value and identified the Islamic banking equilibrium test on the panel data model of the performance of bank  in Indonesia. This study found that the performance of Islamic banking measured by ROA simultaneously affected EAR, NPF, BOPO, FAR and FS and Panzar-Rosse approach will produce H-Stat value which is the sum of three main coefficients ofbanking inputs (labor, capital and funds). With H-Stat valued at 0.735 can be concludedthat the islamic banking industry in indonesia into the category of monopolistic market.The levels of the Islamic banking industry of Bank BNI, Bank BRI, Bank Panin and Bank Bukopin are monopolistic market while Bank Muamalat and Bank Mandiri are directed towards a joint monopoly market in the position of long-term equilibrium.

An Undergraduate Primer on Quality-Differentiated Demand

2020 ◽  
Vol 65 (2) ◽  
pp. 277-283 ◽  
Author(s):  
Charles F. Adams
Keyword(s):  
Resource Use ◽  
Consumer Preferences ◽  
Differentiated Products ◽  
Service Reliability ◽  
Lower Income ◽  
Market Responses ◽  
Demand Structure ◽  
Linear Demand ◽  
Utility Pricing ◽  
Quality Variation

This article presents a student exercise on the logic underlying demand for quality-differentiated products. The argument builds and extends on basic constructs from undergraduate microeconomics, developing a linear demand structure to reflect consumer preferences for quality variation and a brief critique of market responses to those preferences that indicates potentially greater efficiency loses under monopoly once the possibility of quality distortions are accounted for. Various policy extensions are noted. These include applications in utility pricing tied to quality variations in service reliability, the potentially disproportionate impact on lower income households of quality distortions created by monopoly practices, and the potential of profligate resource use by monopolies which are shown to favor higher over lower quality products. Following along with the student exercise is a series of instructor notes with references to the scholarly literature and possible elaborations on various aspects of the exercise that instructors may chose to address. JEL Classifications: D4, D41, D42

A PRICE ADJUSTMENT PROCESS IN A MODEL OF MONOPOLISTIC COMPETITION

2004 ◽  
Vol 06 (03) ◽  
pp. 417-442 ◽  
Author(s):  
JAN TUINSTRA
Keyword(s):  
Monopolistic Competition ◽  
Demand Curve ◽  
Price Adjustment ◽  
Adjustment Process ◽  
Computational Techniques ◽  
Global Dynamics ◽  
Optimal Price ◽  
Demand Structure ◽  
Price Effects ◽  
Linear Demand

We consider a price adjustment process in a model of monopolistic competition. Firms have incomplete information about the demand structure. When they set a price they observe the amount they can sell at that price and they observe the slope of the true demand curve at that price. With this information they estimate a linear demand curve. Given this estimate of the demand curve they set a new optimal price. We investigate the dynamical properties of this learning process. We find that, if the cross-price effects and the curvature of the demand curve are small, prices converge to the Bertrand-Nash equilibrium. The global dynamics of this adjustment process are analyzed by numerical simulations. By means of computational techniques and by applying results from homoclinic bifurcation theory we provide evidence for the existence of strange attractors.

A Note on Pricing With Market Power: Third-Degree Price Discrimination With Quality-Differentiated Demand

2019 ◽  
Vol 64 (2) ◽  
pp. 183-187 ◽  
Author(s):  
Charles F. Adams
Keyword(s):  
Market Power ◽  
Price Discrimination ◽  
Monopoly Power ◽  
Standard Analysis ◽  
Cost Structures ◽  
Efficiency Losses ◽  
Linear Demand ◽  
Jel Classifications

The article points up limitations in the standard undergraduate treatment of third-degree price discrimination by monopolists. While such treatments allude to qualitative distinctions between higher and lower priced alternatives, failure to capture those distinctions in underlying cost and demand structures results in only partial and possibly misleading conclusions about the nature and consequences of such discrimination. Deriving quality-differentiated linear demand and cost structures from the constructs underlying undergraduate microeconomics, the article compares the standard analysis of price discrimination with one that explicitly accounts for quality choices and monopoly power in manipulating those choices. The analysis illustrates the potential for substantially greater monopoly profits and greater efficiency losses by forcing some groups of consumers into suboptimal quality choices once quality variations are explicitly accounted for. JEL Classifications: A1, A22, D11, D21, D42

scholarly journals ANALYSIS OF MARKET STRUCTURE, CONDUCT AND PERFORMANCE OF COPRA IN PARIGI – MOUTONG REGENCY

2021 ◽  
Vol 21 (4) ◽  
pp. 325-332
Author(s):  
Hendra Kurniawan ◽  
Ratya Anindita ◽  
Silvana Maulidah
Keyword(s):  
Market Structure ◽  
Market Share ◽  
Market Performance ◽  
Secondary Data ◽  
Perfect Competition ◽  
Primary Data ◽  
Market Information ◽  
Marketing System ◽  
Monopoly Market ◽  
And Performance

This study aims to find out and investigate how copra farmers receive in Parigi – Moutong Regency. In this study the data used is primary data and secondary data, primary data is taken using questionnaire list. This research uses IHH and CR4 analysis approach, with the aim to find out the market share and market formed in each copra marketing institution in Parigi – Moutong Regency. The results of the research showed from the results of the analysis conducted is the market formed in copra farmers institutions are a perfect competition market, in the institution of traders collectors (middlemen) market formed is a monopoly market, just as the market formed in large traders is also monopoly. The cr4 value obtained is farmers by 30.82%, collectors by 100%, large traders by 100%. From the results obtained the structure of the market is already affecting the market counduct copra, where the merchant become the determinant haraga copra is a collector to be the recipient of the price.in addition, traders do bond in terms of capital (dwon paymen).Copra market performance is inefficient, where copra farmers in Parigi – Moutong are more dominant in selling copra in three marketing lines that have many marketing agencies involved, with a margin of Rp 2,000. referring to the results, it is fair that the weak still of farmers reaching the market information, especially prices, as a result of the share received by farmers is low. Related to this, there needs to be strengthening in farmers institutions related to copra marketing system.

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