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Price Caps in Multiprice Markets

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  • Oren Bar-Gill

Abstract

Many consumer markets feature a multidimensional price. A policy maker--a legislator, a regulator, or a court--concerned about the level of one price dimension may decide to cap this price. How will such a price cap affect other price dimensions? Will the overall effect be good or bad for consumers? For social welfare? Price caps can be beneficial when sellers set prices in response to consumers' misperception. The scope for welfare-enhancing regulation depends on the type (and direction) of the underlying misperception and on market structure.

Suggested Citation

  • Oren Bar-Gill, 2015. "Price Caps in Multiprice Markets," The Journal of Legal Studies, University of Chicago Press, vol. 44(2), pages 453-476.
    • Handle: RePEc:ucp:jlstud:doi:10.1086/684300
    DOI: 10.1086/684300
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    References listed on IDEAS

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    Cited by:

    1. LL. M. Fabrizio Esposito, 2017. "A Dismal Reality: Behavioural Analysis and Consumer Policy," Journal of Consumer Policy, Springer, vol. 40(2), pages 193-216, June.
    2. Guimarães, Bernardo de Vasconcellos & Salama, Bruno Meyerhof, 2017. "Contingent judicial deference: theory and application to usury laws," Textos para discussão 440, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    3. Guimaraesy, Bernardo & Meyerhof Salama, Bruno, 2017. "Contingent judicial deference: theory and application to usury laws," LSE Research Online Documents on Economics 86146, London School of Economics and Political Science, LSE Library.

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