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The B.E. Journal of Theoretical Economics

Editor-in-Chief: Schipper, Burkhard

Ed. by Fong, Yuk-fai / Peeters, Ronald / Puzzello , Daniela / Rivas, Javier / Wenzelburger, Jan

IMPACT FACTOR 2017: 0.220
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Source Normalized Impact per Paper (SNIP) 2017: 0.459

Mathematical Citation Quotient (MCQ) 2017: 0.09

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Snobs and Quality Gaps

Suren Basov
Published Online: 2006-03-31 | DOI: https://doi.org/10.2202/1534-5971.1254

The paper characterizes the optimal provision of quality by a monopolist facing a population of consumers with private valuation for quality. Unlike previous models by Mussa and Rosen (1978) and others, this paper assumes there is a mass of consumers who prefer the highest quality goods. I liken these consumers to snobs who demand the highest valued goods. I show that the quality supplied jumps discontinuously as the highest valued consumers are encountered and the variety of products is reduced as the population of snobs increases. I also show that only snobs may be supplied once their population grows to a critical size.

Keywords: screening; product line; quality gap

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Published Online: 2006-03-31

Citation Information: Contributions in Theoretical Economics, Volume 6, Issue 1, Pages 1–8, ISSN (Online) 1534-5971, DOI: https://doi.org/10.2202/1534-5971.1254.

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