A strategy used by firms in industries such as wireless is to bundle several services into a service plan and administer a nonlinear price with different marginal prices for different usage levels. Moreover firms offer a menu of service plans targeting different consumer segments to implement...

We compare a discriminatory pricing regime with a non-discriminatory regime in a competitive bottleneck model where content providers endogenously sort into single or multi-homers. We find that consumer prices rise when the share of single-homers increases in the non-discriminatory case, while...