On the optimality of the full cost pricing

Thépot, Jacques; Netzer, Jean-Luc

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@article{ Thépot2008,
 title = {On the optimality of the full cost pricing},
 author = {Thépot, Jacques and Netzer, Jean-Luc},
 journal = {Journal of Economic Behavior & Organization},
 number = {1},
 pages = {282-292},
 volume = {68},
 year = {2008},
 doi = {https://doi.org/10.1016/j.jebo.2008.04.007},
 urn = {https://nbn-resolving.org/urn:nbn:de:0168-ssoar-264064},
 abstract = {This article is aimed at defining the full-cost pricing as a leader-follower game in two-tier organizations: (i) the upstream unit fixes the production capacity and uses it as a cost driver to compute the average cost; (ii) the downstream unit operates on the market and chooses the output level on the basis of the average cost. In the Cournot oligopoly case, the full-cost pricing is compared with other pricing rules. There exists a wide range of values of the fixed cost, for which the full-cost pricing dominates any other pricing rules, in terms of gross profit.},
}