TWO-PART TARIFFS AND MULTISTAGE PROGRAMMING

TWO-PART TARIFFS AND MULTISTAGE PROGRAMMING

This article demonstrates the relationship between the utility function's parameters which represent consumer's taste and the reservation price. We describe the changes in the reservation price analytically and supplement the geometrical illustrations by economic interpretations. We formul...

Full description

Bibliographic Details
Main Authors: Ilko Vrankić, Zrinka Lukač, Mira Oraić
Format: Article
Language:English
Published: Croatian Operational Research Society 2011-02-01
Series:Croatian Operational Research Review
Subjects:
two-part tariff
reservation price
price of a capital good
service price
homogeneous and heterogeneous consumers
two-stage programming
Online Access:http://hrcak.srce.hr/index.php?show=clanak&id_clanak_jezik=142222
Description
Summary:This article demonstrates the relationship between the utility function's parameters which represent consumer's taste and the reservation price. We describe the changes in the reservation price analytically and supplement the geometrical illustrations by economic interpretations. We formulate the monopolist’s problem of setting the price of a capital good and the price of a service that the capital good provides as the two stage programming problem and illustrate the influence of consumers’ preferences and their income on the service market client structure and monopolist’s decisions on couple of illustrative examples.
ISSN:1848-0225
1848-9931

Similar Items