o:37209 DEMAND RATIONING RULES: BEYOND EFFICIENCY AND PROPORTIONALITY en Abstract: This paper examines demand rationing mechanisms in oligopoly models beyond the classical efficient and proportional rules, with a focus on capacity-constrained price competition. Efficient rationing assumes that consumers with the highest willingness to pay are served first by the lower-priced firm. In contrast, proportional rationing assigns all consumers an equal chance to buy. We introduce a general framework parameterised by α, encompassing both classical rules as special cases and enabling the modelling of switching-cost-based rationing. Such a framework captures the impact of consumer inertia, search frictions, or contractual obligations on residual demand. Our analysis reveals that different rationing rules have a significant effect on equilibrium outcomes and firms’ strategic choices, particularly in terms of capacity and pricing. Departures from the efficient rule may weaken or amplify competitive intensity, thus reshaping market power. These insights directly affect competition protection policy, particularly in the areas of horizontal restrictive agreements, abuse of dominant position, and merger control. The findings advocate for a more nuanced integration of rationing rules into oligopoly models and policy tools. Keywords: capacities, Bertrand-Edgeworth competition, rationing rules, switching costs. 1552100 978-86-7680-494-8 2025-12-03T11:53:42.935Z 44 no 46 Bojan Ristić Univerzitet u Beogradu Ekonomski fakultet 0000-0002-9883-8914 Nikola Njegovan Univerzitet u Beogradu Ekonomski fakultet person 0000-0002-9531-323 application/pdf 1300344 https://phaidrabg.bg.ac.rs/o:37209 no yes 1 70 92000002 11A03 International Symposium on Operational Research, SYM-OP-IS 2025, Palić, 7-10. septembar 2025 112 117 Belgrade: University of Belgrade, Faculty of Organisational Sciences 2025