Year: 2025
Type: preprint
Abstract: We study price regulation for a monopolist operating in networked markets with demand spillovers. Achieving efficiency requires price reductions proportional to consumers' Katz-Bonacich centralities, which generally cannot be implemented by commonly used price regulations. Moreover, these regulations become asymptotically welfare neutral as spillovers grow. Nevertheless, some price regulations may still benefit consumers. In particular, average-price regulation robustly increases consumer surplus. By contrast, banning price discrimination increases consumer surplus only when more central consumers have higher intrinsic willingness to pay.
Source: arXiv (Cornell University)
Authors: Li, Chengqing, Zhou, Junjie
Institution: Tsinghua University
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7077973846
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