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Brand Name and Private Label Price Setting by a Monopoly Store

By  |  December 3, 2012

Posted by D. Daniel Sokol

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    Jeffrey M. Perloff (Berkeley), Jeffrey T. LaFrance (Monash University) and Hayley H. Chouinard (Washington State University) discuss Brand Name and Private Label Price Setting by a Monopoly Store

    ABSTRACT: A monopoly that sells to brand-name loyal customers and to price-sensitive customers must decide whether to carry both name-brand and a private-label products and how much to charge. The monopoly may charge either more or less for the brand name if it carries a private label, and the price differential between the products is sensitive to cost and taste parameters.