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A durable good monopolist faces a continuum of heterogeneous customers who make purchase decisions by comparing present and expected price-quality offers. The monopolist designs a sequence of price-quality menus to segment the market. We consider the Markov Perfect Equilibrium (MPE) of a game...
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that may even exceed the static monopoly price. 2) Honest certification exhibits economies of scale and constitutes a … natural monopoly. 3) Price competition tends to a monopolization. The results derive from a general principle of reputation …
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