Monopolistic price setting under fuzzy information

We consider a profit maximizing monopolistic firm that sets prices in the presence of improper information about the demand for its products. This information deficiency is viewed as being vagueness rather than stochastic uncertainty and modelled by a family of fuzzy sets. Applying a defuzzification strategy that explicitly takes the firm's attitude towards deviations of actual demand from its most possible values into account, we derive explicit solutions to the maximization problem of a single-product and a general multi-product firm. Furthermore, some comparative static results are established. (C) 2003 Elsevier B.V. All rights reserved.