Equilibrium with Two-Part Monopoly Pricing Sample Clauses

Equilibrium with Two-Part Monopoly Pricing. A monopolist who charges an upfront premium and an ex post copayment maximizes profits subject to reservation utility conditions (i.e., participation constraints) and incentive constraints. max C C N I C + (mC − MC)∫1 qC µ C (h)dh + I N + (m N − MC)∫1 q N µ N (h)dh m ,I s.t. ,m ,I 0 0 ∫ 1u(W − I N − m N q N , q N , h)µ N (h)dh 0 ∫ ≥ 1 u(W − I C − mC qC , qC , h)µ N (h)dh 0 ∫ 1u(W − I C − mC qC , qC , h)µ C (h)dh 0 ∫ ≥ 1 u(W − I N − m N q N , q N , h)µ C (h)dh 0 ∫ 1u(W − I C − mC qC , qC , h)µ C (h)dh ≥ u C ∫ 1u(W − I N − m N q N , q N , h)µ N (h)dh ≥ uN
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