Nonlinear Pricing with Average-Price Bias
David Martimort
(1, 2)
,
Lars Stole
(3)
David Martimort
- Fonction : Auteur
- PersonId : 1043577
- ORCID : 0000-0002-4185-8703
- IdRef : 070009635
Résumé
Empirical evidence suggests that consumers facing complex nonlinear prices often make choices based on average (not marginal) prices. Given such behavior, we characterize a monopolist's optimal nonlinear price schedule. In contrast to the textbook setting, nonlinear prices designed for "average-price bias" distort consumption downward for consumers with the highest marginal utility and typically feature quantity premia rather than quantity discounts. These properties arise because the bias replaces consumer information rents with "curvature rents." Whether or not a monopolist prefers consumers with average-price bias depends upon underlying preferences and costs.
Domaines
Economies et financesFormat du dépôt | Notice |
---|---|
Type de dépôt | Article dans une revue |
Titre |
en
Nonlinear Pricing with Average-Price Bias
|
Résumé |
en
Empirical evidence suggests that consumers facing complex nonlinear prices often make choices based on average (not marginal) prices. Given such behavior, we characterize a monopolist's optimal nonlinear price schedule. In contrast to the textbook setting, nonlinear prices designed for "average-price bias" distort consumption downward for consumers with the highest marginal utility and typically feature quantity premia rather than quantity discounts. These properties arise because the bias replaces consumer information rents with "curvature rents." Whether or not a monopolist prefers consumers with average-price bias depends upon underlying preferences and costs.
|
Auteur(s) |
David Martimort
1, 2
, Lars Stole
3
1
PSE -
Paris School of Economics
( 301309 )
- 48 boulevard Jourdan 75014 Paris
- France
2
PJSE -
Paris Jourdan Sciences Economiques
( 578027 )
- 48 boulevard Jourdan 75014 Paris
- France
3
University of Chicago
( 129172 )
- Edward H. Levi Hall 5801 South Ellis Avenue Chicago, Illinois 60637
- États-Unis
|
Langue du document |
Anglais
|
Nom de la revue |
|
Vulgarisation |
Non
|
Comité de lecture |
Oui
|
Audience |
Internationale
|
Date de publication |
2020-09
|
Volume |
2
|
Numéro |
3
|
Page/Identifiant |
375-396
|
Public visé |
Scientifique
|
Domaine(s) |
|
Mots-clés (JEL) |
|
DOI | 10.1257/aeri.20190272 |
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