When two-part tariffs are not enough: Mixing with nonlinear pricing
We consider competition in nonlinear tariffs when consumers mix two goods, and ask whether simple two-part tariffs or exclusivity can arise in equilibrium. Contrary to the existing literature, this happens only when consumer types are observable. If they are unobservable, then the equilibrium tariff has decreasing marginal prices even when goods are almost homogeneous, and a third of consumers always mixes goods. Two-part tariffs will never even arise as best responses to arbitrary tariffs.
|Date of creation:||Feb 2010|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- repec:adr:anecst:y:1994:i:34:p:04 is not listed on IDEAS
- Stole, Lars A, 1995. "Nonlinear Pricing and Oligopoly," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(4), pages 529-62, Winter.
- Giacomo Calzolari & Vincenzo Denicol?, 2013.
"Competition with Exclusive Contracts and Market-Share Discounts,"
American Economic Review,
American Economic Association, vol. 103(6), pages 2384-2411, October.
- Calzolari, Giacomo & Denicolò, Vincenzo, 2009. "Competition with exclusive contracts and market-share discounts," CEPR Discussion Papers 7613, C.E.P.R. Discussion Papers.
- Marc Ivaldi & David Martimort, 1994.
"Competition under Nonlinear Pricing,"
Annals of Economics and Statistics,
GENES, issue 34, pages 13-69.
- Anderson, S. & Neven, D.J., 1986.
"Market efficiency with combinable products,"
CORE Discussion Papers
1986045, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Chiesa, Gabriella & Denicolò, Vincenzo, 2009. "Trading with a common agent under complete information: A characterization of Nash equilibria," Journal of Economic Theory, Elsevier, vol. 144(1), pages 296-311, January.
- B. Douglas Bernheim & Michael D. Whinston, 1996.
NBER Working Papers
5666, National Bureau of Economic Research, Inc.
- Bernheim, B.D., 1992. "Exclusive Dealing," Harvard Institute of Economic Research Working Papers 1622, Harvard - Institute of Economic Research.
- B. Douglas Bernheim & Michael D. Whinston, . "Exclusive Dealing," Working Papers 96008, Stanford University, Department of Economics.
- repec:adr:anecst:y:1994:i:34 is not listed on IDEAS
- Armstrong, Mark & Vickers, John, 2001. "Competitive Price Discrimination," RAND Journal of Economics, The RAND Corporation, vol. 32(4), pages 579-605, Winter.
- Mark Armstrong & John Vickers, 2010.
"Competitive Non-linear Pricing and Bundling,"
Review of Economic Studies,
Oxford University Press, vol. 77(1), pages 30-60.
- Armstrong, Mark & Vickers, John, 2006. "Competitive nonlinear pricing and bundling," MPRA Paper 70, University Library of Munich, Germany.
- John Vickers & Mark Armstrong, 2006. "Competitive Nonlinear Pricing and Bundling," Economics Series Working Papers 281, University of Oxford, Department of Economics.
- Matutes, Carmen & Regibeau, Pierre, 1992. "Compatibility and Bundling of Complementary Goods in a Duopoly," Journal of Industrial Economics, Wiley Blackwell, vol. 40(1), pages 37-54, March.
- Armstrong, Mark, 2006. "Price discrimination," MPRA Paper 4693, University Library of Munich, Germany.
- Jean J. Gabszewicz & Didier Laussel & Nathalie Sonnac, 2004.
"Programming and Advertising Competition in the Broadcasting Industry,"
Journal of Economics & Management Strategy,
Wiley Blackwell, vol. 13(4), pages 657-669, December.
- GABSZEWICZ, Jean J. & LAUSSEL, Didier & SONNAC, Nathalie, . "Programming and advertising competition in the broadcasting industry," CORE Discussion Papers RP 1873, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Esther Gal-Or & Anthony Dukes, 2003. "Minimum Differentiation in Commercial Media Markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(3), pages 291-325, 09.
- John Thanassoulis, 2006.
"Competitive Mixed Bundling and Consumer Surplus,"
Economics Series Working Papers
263, University of Oxford, Department of Economics.
- Brian McManus, 2007. "Nonlinear pricing in an oligopoly market: the case of specialty coffee," RAND Journal of Economics, RAND Corporation, vol. 38(2), pages 512-532, 06.
- David Martimort & Lars Stole, 2009. "Market participation in delegated and intrinsic common-agency games," RAND Journal of Economics, RAND Corporation, vol. 40(1), pages 78-102.
- repec:adr:anecst:y:1994:i:34:p:03 is not listed on IDEAS
- Martimort, David & Stole, Lars, 2011. "Public Contracting in Delegated Agency Games," MPRA Paper 32874, University Library of Munich, Germany.
- Jean-Charles Rochet & Lars A. Stole, 2002. "Nonlinear Pricing with Random Participation," Review of Economic Studies, Oxford University Press, vol. 69(1), pages 277-311.
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:7720. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.