Volume 1, No. 2, August 2002
Rationing as a Signal


Jeong-Yoo Kim*
Department of Economics, University at Albany, SUNY, U.S.A.
and
Department of Economics, Dongguk University, South Korea


Abstract


Two consumers sequentially purchase at most one unit of some homogeneous good from a monopolist who knows the state of nature, either high or low. I characterize a rationing equilibrium at which the high-type monopolist produces only one unit and rations customers, whereas the low-type monopolist serves customers by producing two units.

Key words : rationing; quality; signals; sequential purchases
JEL classification : D45; L12; L15



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