A monopolist facing a free capacity-constrained public option restricts its own output to induce rationing and extract higher payments, with derived conditions under which public capacity expansion benefits all consumer types.
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Optimal redistributive segmentations induce the monopolist to charge higher prices to richer consumers and are implementable via price-based regulation.
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Luck Out or Outpay? Competing with a Public Option
A monopolist facing a free capacity-constrained public option restricts its own output to induce rationing and extract higher payments, with derived conditions under which public capacity expansion benefits all consumer types.
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Redistribution Through Market Segmentation
Optimal redistributive segmentations induce the monopolist to charge higher prices to richer consumers and are implementable via price-based regulation.