Diagnosing Efficiency of Distortion in Discrete Screening
We study the screening or nonlinear pricing for discrete consumer types when the single-crossing condition need not hold. A method is developed to reveal social eff±ciency or distortion of equilibria from market observations. The two known indicators of effciency, namely absence of almost-envy by a consumer for other consumer's package; or per-package profit similarity, are extended. The third, empirically more useful, new crite rion is based on demand parametrization, observed tariffs, package sizes, and some approximate estimate of marginal cost. Application of this criterion to several consumer goods shows existence of overall effciency or oversized packages in reality, both contradicting Spence-Mirrlees condition. The methodological contribution is elaborating 'envy-graph” notions to desribe solution structures.
|Date of creation:||06 Nov 2008|
|Contact details of provider:|| Postal: EERC Research Network, Russia and CIS, 92/94, Dmytrivska Str., suite 404, Kyiv, 01135 Ukraine|
Web page: http://www.eercnetwork.com
|Order Information:|| Postal: EERC Research Network, Russia and CIS, 92/94, Dmytrivska Str., suite 404, Kyiv, 01135 Ukraine|
Web: https://eercnetwork.com/paper Email:
References listed on IDEAS
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.:
- Srinagesh, Padmanabhan & Bradburd, Ralph M, 1989.
"Quality Distortion by a Discriminating Monopolist,"
American Economic Review,
American Economic Association, vol. 79(1), pages 96-105, March.
- Babu Nahata & Serguei Kokovin & Evgeny Zhelobodko, 2003. "Package Sizes, Tariffs, Quantity Discount and Premium," General Economics and Teaching 0307002, EconWPA.
- Walter Y. Oi, 1971. "A Disneyland Dilemma: Two-Part Tariffs for a Mickey Mouse Monopoly," The Quarterly Journal of Economics, Oxford University Press, vol. 85(1), pages 77-96.
- Gerstner, Eitan & Hess, James D, 1987. "Why Do Hot Dogs Come in Packs of 10 and Buns in 8s or 12s? A Demand-Side Investigation," The Journal of Business, University of Chicago Press, vol. 60(4), pages 491-517, October.
- Eric Maskin & John Riley, 1984. "Monopoly with Incomplete Information," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 171-196, Summer.
- Guesnerie, Roger & Seade, Jesus, 1982.
"Nonlinear pricing in a finite economy,"
Journal of Public Economics,
Elsevier, vol. 17(2), pages 157-179, March.
- Michael L. Katz, 1983. "Non-uniform Pricing, Output and Welfare under Monopoly," Review of Economic Studies, Oxford University Press, vol. 50(1), pages 37-56.
- Andersson, Tommy, 2005. "Profit maximizing nonlinear pricing," Economics Letters, Elsevier, vol. 88(1), pages 135-139, July.
- Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
When requesting a correction, please mention this item's handle: RePEc:eer:wpalle:08/02e. 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: (Anton Pashchenko)
If references are entirely missing, you can add them using this form.