Multiproduct Nonlinear Pricing PDF Download
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Author: Mark Armstrong
Publisher:
ISBN:
Category : Manufacturing industries
Languages : en
Pages : 33
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Book Description
Author: Mark Armstrong
Publisher:
ISBN:
Category : Manufacturing industries
Languages : en
Pages : 33
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Book Description
Author: Robert B. Wilson
Publisher: Oxford University Press, USA
ISBN: 9780195115826
Category : Business & Economics
Languages : en
Pages : 446
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Book Description
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: Yossi Spiegel
Publisher:
ISBN:
Category : Pricing
Languages : en
Pages : 24
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Book Description
Author: David Summer Sibley
Publisher:
ISBN:
Category : Pricing
Languages : en
Pages : 24
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Book Description
Author: Yao Luo
Publisher:
ISBN:
Category :
Languages : en
Pages : 40
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Book Description
I develop a multiproduct nonlinear pricing model where a firm sells both discrete and continuous goods/services to consumers with multidimensional heterogeneity. I derive the optimal selling mechanism and provide primitive conditions under which different bundling strategies arise. Exploiting the optimality conditions of both the firm and the consumer, I show that the model structure is nonparametrically identified and propose a three-step semiparametric estimation procedure. An application to China Telecom data shows that mixed bundling is beneficial to both the firm and the consumer relative to component pricing.
Author: Glen L. Urban
Publisher: Forgotten Books
ISBN: 9780332978765
Category : Business & Economics
Languages : en
Pages : 46
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Book Description
Excerpt from Price and Non-Price Determination in the Multiproduct Firm, 227-66 See T. E. Pfouts, The Theory of Cost and Production in the Multiproduct Firm, Econometrica XXIX (october pp. 650-658 for a non-linear formulation. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.
Author: Bridger M. Mitchell
Publisher: Cambridge University Press
ISBN: 9780521426787
Category : Business & Economics
Languages : en
Pages : 332
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Book Description
Systematically reviews recent innovations in the economic theory of pricing and extends results to the conditions which characterize telecommunications markets
Author: Shmuel Oren
Publisher:
ISBN:
Category : Prices
Languages : en
Pages : 27
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Book Description
A central issue in price theory is how to set prices for services that require the seller to incur a setup cost. In this paper we adopt a novel approach using nonlinear pricing, and address the special case of a monopoly. Restrictive assumptions are imposed on the cost and demand functions, but these enable a complete characterization of the optimal pricing policy. The problem we address is formally one of nonlinear pricing for a multiproduct monopoly, which has been studied by Mirman and Sibley 1980. However, their analysis does not recognize the crucial role of the discontinuity in the cost function and its ramifications for the optimal pricing policy. (Author).
Author: Garrett Patrick Hagemann
Publisher:
ISBN:
Category :
Languages : en
Pages : 222
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Book Description
This dissertation addresses several open issues in the economics surrounding the use of nonlinear pricing. The first chapter empirically examines the impact of the use of nonlinear pricing by wholesalers. The second chapter evaluates how firm profit depends on the number of prices offered in a nonlinear price schedule. Finally, the third chapter investigates the use of all-unit discounts as a price discrimination instrument. The first chapter exploits a unique data set of price schedules to provide the first empirical estimate of the welfare impact of second degree price discrimination in a market with double marginalization. Theoretical predictions in such a context are ambiguous. Quantity discounts at the wholesale level reduce costs for larger retailers, increasing efficiency. However, quantity discounts raise input costs for smaller retailers, increasing prices consumers may pay. The combined welfare effects on consumers umers depends on how much of input cost discounts are passed through to consumers and the distribution of retailer size. I develop and estimate a model of the New York State retail liquor market where wholesalers offer a multi-part nonlinear tariff for each product. The structural model is then used to estimate the welfare impact of restricting wholesale pricing to be linear. I find that banning quantity discounts reduces total welfare by approximately 14% on average. Consumer surplus and wholesaler profit decline by approximately 26% on average. Average retailer profit increases by a similar magnitude, though effects for a particular retailer are heterogeneous across retailer size. The second chapter examines the shape of observed price schedules more directly. Sellers often offer price schedules with relatively few segments rather than completely nonlinear price schedules which offer a unique price for each unit sold. By not offering a completely nonlinear, sellers are foregoing some additional profit in favor of a simpler pricing strategy. I find that the scale of these foregone profits is relatively small and only loosely related to product characteristics. When considered in percentage terms, foregone profits are very similar across a large number of products. This suggests that simple pricing strategies obtain almost all the profits available and this is a common property of nonlinear pricing strategies. The final chapter compares price discrimination through two different quantity discount mechanisms: all-unit discounts and incremental discounts. All-unit-discounts give consumers a lower marginal price on all units purchased once total purchase size crosses a threshold. Incremental discounts only provide discounts on units above the threshold. Relative to incremental discounts, all-unit-discounts imply higher marginal prices and bunching of purchase sizes in equilibrium. The equilibrium bunching may present a challenge for estimating the model empirically.
Author: Soheil Ghili
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
In "continuous choice" settings, consumers decide not only on whether to purchase a product, but also on how much to purchase. As a result, firms should optimize a full price schedule rather than a single price point. This paper provides a methodology to empirically estimate the optimal schedule under multi-dimensional consumer heterogeneity. We apply our method to novel data from an educational-services firm that contains purchase-size information not only for deals that materialized, but also for potential deals that eventually failed. We show that the optimal second-degree price discrimination (i.e., optimal nonlinear tariff) improves the firm's profit upon linear pricing by about 7.9%. That said, this second-degree price discrimination scheme only recovers 7.4% of the gap between the profitability of linear pricing (i.e., no price discrimination) and that of infeasible first degree price discrimination. We also conduct several further counterfactual analyses (i) comparing the role of demand- v.s. cost-side factors in shaping the optimal price schedule, (ii) examining third-degree price discrimination, and (iii) empirically quantifying the magnitude by which incentive-compatibility constraints impact the optimal pricing and profits.
