International Journal of Business and Economics 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.

Keywords：rationing, quality, signals, sequential purchases.

JEL Classifications：D45, L12, L15.

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