In many settings, behavioral economists have documented a price reference effect: the fact that a consumer's willingness to pay for a good is affected by difference between the observed price and the reference price they rationally expect. In this paper, we show that such preferences interact...

We consider a vertically related market where one quantity-setting and another price-setting downstream firm negotiate the terms of a two-part tariff contract with an upstream input supplier. In contrast to the traditional belief, we show that the price-setting firm produces a higher output and...

Fuel prices are commonly perceived to be excessively high, which regularly triggers political discussions about fuel price regulations. Consumers demand stricter fuel price regulations to provide transparency about the current price level and to protect them from sudden price fluctuations. Such...

The paper introduces a specification of the demand side which allows RPM to have different effects on prices and on service, which may increase or decrease due to RPM. A feature of the model which deviates from those found in the literature is due to the introduction of a class of consumers who...