Implementation Of Competitive Nonlinear Pricing
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| Author | : Sissel Jensen |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2006 |
| Genre | : |
| ISBN | : |
The paper studies how the optimal nonlinear quantity-payment allocation can be truthfully implemented by optional tariffs in a differentiated goods duopoly. Consumers choose from a menu of tariffs and are subsequently billed according to this. We find that implementation by simple two part tariffs may not be a feasible strategy in a duopoly because the optimal nonlinear tariff exhibits a convexity for lower quantities. We show that the optimal outcome can be implemented if the firms can use two part tariffs with inclusive consumption. The fixed fee includes a free consumption allowance, whereas subsequent consumption is charged according to a steep unit price. That way the firm is able to secure voluntary participation without violating the incentive constraint. The paper show some examples from the telecommunications industry where firms offer two part tariffs with free call minutes to low demand segments.
| Author | : Frank H. Page |
| Publisher | : |
| Total Pages | : 33 |
| Release | : 2001 |
| Genre | : Economics |
| ISBN | : |
| Author | : Andrea Attardi |
| Publisher | : |
| Total Pages | : 46 |
| Release | : 2015 |
| Genre | : Assets (Accounting) |
| ISBN | : |
Many financial markets rely on a discriminatory limit-order book to balance supply and demand. We study these markets in a static model in which uninformed market makers compete in nonlinear tariffs to trade with an informed insider, as in Glosten (1994), Biais, Martimort, and Rochet (2000), and Back and Baruch (2013). We analyze the case where tariffs are unconstrained and the case where tariffs are restricted to be convex. In both cases, we show that pure-strategy equilibrium tariffs must be linear and, moreover, that such equilibria only exist under exceptional circumstances. These results cast doubt on the stability of even well-organized financial markets.
| Author | : Robert B. Wilson |
| Publisher | : Oxford University Press, USA |
| Total Pages | : 446 |
| Release | : 1993 |
| Genre | : Business & Economics |
| ISBN | : 9780195115826 |
What do phone rates, frequent flyer programs, and railroad tariffs all have in common? They are all examples of nonlinear pricing. Pricing is nonlinear when it is not strictly proportional to the quantity purchased. The Electric Power Research Institute has commissioned Robert Wilson to review the various facets of nonlinear pricing. The work starts with a general non-mathematical discussion, followed by a more technical presentation intended for readers with a fairly advanced background. Thorough and detailed, this study has ample examples of case studies from a variety of industries.
| Author | : Andrea Attar |
| Publisher | : |
| Total Pages | : |
| Release | : 2021 |
| Genre | : |
| ISBN | : |
| Author | : Robert J. Doan |
| Publisher | : Simon and Schuster |
| Total Pages | : 392 |
| Release | : 1996 |
| Genre | : Business & Economics |
| ISBN | : 068483443X |
In one compact volume, here are the innovative tactics business leaders need to attain maximum financial performance for their companies. Whether they're selling beer or land, this book is one book managers can't afford to ignore
| Author | : Eduardo Brou |
| Publisher | : |
| Total Pages | : 24 |
| Release | : 2013 |
| Genre | : |
| ISBN | : |
According to received Economic Theory, the implementation of price discrimination by a firm requires market power, at least in the short term. However, mere observation of reality, confirmed by empirical studies, shows that in extremely competitive industries, with approximately zero economic profit, the practice of price discrimination is verified, especially its second degree variant (Nonlinear Pricing), this phenomenon being more the rule than the exception.This paper explains theoretically the sustainability of second degree price discrimination in perfectly contestable markets (a generalisation of the notion of perfectly competitive markets i.e. those without any market power), thus explaining an empirical phenomenon not authorised by received Economic Theory. Nonlinear Pricing systems emerge as mechanisms that, in competitive environments, and with minimal central planning (centralisation of information), will allow greater social efficiency, constituting a "second-best invisible hand."
| Author | : Gaurab Aryal |
| Publisher | : |
| Total Pages | : 42 |
| Release | : 2019 |
| Genre | : |
| ISBN | : |
We estimate a model of competitive nonlinear pricing with multidimensional preference heterogeneity using individual level data on advertisements bought by local businesses (e.g., doctors, electricians) from two Yellow Page Directories in one U.S. city-market. Variation in individual choices and payments allow us to identify the joint density of preferences, marginal costs of publishing and common utility parameters. Our estimates suggest substantial welfare loss due to asymmetric information. Comparing duopoly outcomes with (counterfactual) monopoly outcomes, we find that with less competition (i) producer surplus increases substantially; (ii) more “low-type” consumers are excluded; (iii) product variety increases, but benefits accrue only to the “high-type” consumers; (iv) total consumer surplus decreases; (v) but its distribution, across consumers, does not change.
| Author | : Jean-Charles Rochet |
| Publisher | : |
| Total Pages | : 13 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
We study competitive nonlinear pricing in a model involving simultaneously horizontal and vertical product differentiation. It is a particular case of a more general model of optimal contracting with uncertain participation that we study elsewhere (Rochet-Stole (1997)).
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The Department of Economics at the University of Warwick presents the full text of the research paper entitled "Three Principles of Competitive Nonlinear Pricing," by Frank H. Page, Jr. and Paulo K. Monteiro that was published in May 2001. The paper is in PDF format. The authors discuss nonlinear pricing games and Nash equilibrium, the competitive taxation principle, the delegation principle, and the competitive revelation principle.
