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Summary of Results for the Static Model

We calculate a numerical example to illustrate the relationships between the various pricing strategies. Suppose that w = 10, N = 10, and tex2html_wrap_inline581 . In Table 1 we report the resulting profits, consumers' surplus, and social welfare.gif We report in the last row the results if the producer knew how much each consumer valued each specific article, rather than just the values as a function of the number of articles. In this case of perfect price discrimination the producer would charge each consumer a different price for each article (thus the price schedule would have the number of consumers times N parameters); this provides a benchmark for the maximal profit possible if the producer could obtain perfect information.

  table213
Table 1: Example of one-period complete information results: Optimal profit per good with w = 10, N = 10, and tex2html_wrap_inline581



kephart
Sat Oct 23 00:54:56 EDT 1999