Linear Tariffs with Quality Discrimination
When a good or service is offered in a variety of qualities with corresponding marginal prices, a quality-based allocation of consumption units by buyers is induced. This enables a monopolist supplier to achieve partial discrimination among buyers with different consumption preferences. We consider the situation in which a monopoly supplier, with complete information about the distribution of customer preferences, selects a generalized two-part tariff consisting of a single fixed subscription charge and quality dependent marginal charges. We analyze consumer behavior and optimal pricing strategies with and without positive demand externalities.
Year of publication: |
1982
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Authors: | Oren, Shmuel S. ; Smith, Stephen A. ; Wilson, Robert B. |
Published in: |
Bell Journal of Economics. - The RAND Corporation, ISSN 0361-915X. - Vol. 13.1982, 2, p. 455-471
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Publisher: |
The RAND Corporation |
Saved in:
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