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Package Sizes, Tariffs, Quantity Discount and Premium

Authors: Babu Nahata; Serguei Kokovin; Evgeny Zhelobodko;

Package Sizes, Tariffs, Quantity Discount and Premium

Abstract

We analyze nonlinear pricing problem under monopoly using two hidden types of agents with linear demands and fully characterize all possible optimal solutions for both ordered and non-ordered demands. We show that both optimal packages can either contain Pareto-efficient quantities or one package can be undersized or oversized. All these effects are non-degenerate and are expected to hold for nonlinear demands.Surprisingly, the total output under nonlinear price discrimination with self-selection is neither unambigously realted to efficiency nor to the degree of monopoly power (demand elasticity). We also show that under limited range of parameters quantity premia can occur only when demands are ordered.

Related Organizations
Keywords

Principal-agent, self-selection, nonlinear pricing, package pricing, Pareto efficiency, jel: jel:L10, jel: jel:D42, jel: jel:L40

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Found an issue? Give us feedback
selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
6
Average
Top 10%
Top 10%
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