IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

The Limited Gains From Complex Tariffs

Listed author(s):
  • Miravete, Eugenio
Registered author(s):

    This paper uses an equilibrium model of multipart nonlinear pricing to determine the magnitude of foregone profits due to the implementation of simple tariff options. I then use the available information from a cross-section of independent cellular telephone markets to study how these foregone profits vary with markets' observable characteristics. Results show that commercialization costs effectively limit the number of tariff options offered to consumers. The evidence presented in this paper suggests that firms should only offer a few tariff options if their commercialization and product development costs are non-negligible. More importantly this evidence favors the use of two-part tariffs and other simple pricing strategies in theoretical modeling in order to overcome the analytical difficulties of the existing general models of nonlinear pricing and thus responds to the many open questions in the area of nonlinear pricing.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://researcharchive.vuw.ac.nz/handle/10063/3971
    Download Restriction: no

    Paper provided by Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation in its series Working Paper Series with number 3971.

    as
    in new window

    Length:
    Date of creation: 2007
    Handle: RePEc:vuw:vuwcsr:3971
    Contact details of provider: Postal:
    ISCR, PO Box 600, Victoria University Wellington 6140, New Zealand

    Phone: +64 (4) 463 5562
    Web page: http://www.iscr.co.nz/
    Email:


    More information through EDIRC

    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.:

    as
    in new window


    1. Matt Shum & G Crawford, 2003. "Monopoly Quality Degradation in Cable Television," Economics Working Paper Archive 502, The Johns Hopkins University,Department of Economics.
    2. Dionissis Dimopoulos, 1981. "Pricing Schemes for Regulated Enterprises and Their Welfare Implications in the Case of Electricity," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 185-200, Spring.
    3. Eugenio Miravete, 2007. "“Competing with Menus of Tariff Options”," Working Papers 07-02, NET Institute, revised Jul 2007.
    4. Katja Seim & V. Brian Viard, 2011. "The Effect of Market Structure on Cellular Technology Adoption and Pricing," American Economic Journal: Microeconomics, American Economic Association, vol. 3(2), pages 221-251, May.
    5. Guesnerie, Roger & Laffont, Jean-Jacques, 1984. "A complete solution to a class of principal-agent problems with an application to the control of a self-managed firm," Journal of Public Economics, Elsevier, vol. 25(3), pages 329-369, December.
    6. Goffe, William L. & Ferrier, Gary D. & Rogers, John, 1994. "Global optimization of statistical functions with simulated annealing," Journal of Econometrics, Elsevier, vol. 60(1-2), pages 65-99.
    7. Anja Lambrecht & Katja Seim & Bernd Skiera, 2007. "Does Uncertainty Matter? Consumer Behavior Under Three-Part Tariffs," Marketing Science, INFORMS, vol. 26(5), pages 698-710, 09-10.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:vuw:vuwcsr:3971. 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: (Library Technology Services)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.