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Monopolistic Quantity Rationing

Volker Böhm; Eric Maskin; Heraklis Polemarchakis; Andrew Postlewaite

In this paper we address the question of whether a price-setting monopolist can improve his welfare by imposing quantity constraints on buyers. We show first that if all buyers are identical, quantity rations are not useful for the monopolist. We then show by means of an example that if buyers are diverse, quantity rations may be desirable. It is shown that if there are only two commodities, the only constraint that may be useful to the monopolist is a zero constraint on one of the two commodities. An example shows that this property does not hold for more than two commodities.

DOI

10.2307/1885380

Volume

98

Pages

189

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