
Monopoly pricing is examined in a general framework with an unknown population distribution of consumer characteristics, downward-sloping, multi-unit consumer demand, and increasing marginal cost. Reference point pricing is introduced and is shown to implement the profit-maximizing allocation. Using central limit theorem arguments, nonlinear pricing is shown to be approximately optimal for the monopolist as the number of consumers gets large.
Auctions, bargaining, bidding and selling, and other market models, nonlinear pricing, reference point pricing, central limit theorem, Microeconomic theory (price theory and economic markets), monopoly pricing
Auctions, bargaining, bidding and selling, and other market models, nonlinear pricing, reference point pricing, central limit theorem, Microeconomic theory (price theory and economic markets), monopoly pricing
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