Monopoly Profit Maximization: Success and Economic Principles

Korbinian von Blanckenburg, Milena Neubert
2015 Economics Research International  
This paper presents a classroom experiment on pricing strategies available to monopolists. Each student makes production decisions as a monopolist during the experiment, learning from his/her own experiences what it means to be a price searcher. Full information is provided on cost conditions, while the demand function remains unknown to the participants. Given a sufficient number of periods, students will in principle be able to maximise their profits by applying a simple trial and error
more » ... gy. However, one of the objectives of the experiment is to demonstrate to students that search strategies based on economic principles are more efficient.
doi:10.1155/2015/875301 fatcat:ch6ga4dcyraf3bh57tv44vrwfi