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International Journal of Business and Economics

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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