Optimal pricing scheme for addictive goods.
This article analyses how consumers' habit formation and addiction affect firms' pricing policies. I consider both sophisticated consumers, who realize that their current consumption will affect future tastes, and "naive" consumers, who do not. The optimal contract for sophisticated consumers is a t...
| Publicado en: | RAND Journal of Economics (Wiley-Blackwell) Vol. 55; no. 4; pp. 603 - 627 |
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| Formato: | Artículo |
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Wiley-Blackwell
Dec2024
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=181730990&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 181730990 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 07416261 56RJ jtl: RAND Journal of Economics (Wiley-Blackwell) issn: 07416261 maglogo: Y pubinfo: dt: Dec2024 vid: 55 iid: 4 pid: 480 pub: Wiley-Blackwell artinfo: ui: 181730990 10.1111/1756-2171.12486 ppf: 603 ppct: 24 formats: fmt: – @attributes: type: T – @attributes: type: C – @attributes: type: P size: 404KB tig: atl: Optimal pricing scheme for addictive goods. aug: au: Triviza, Eleftheria affil: Department of Economics, University of Mannheim and MaCCI su: Prices Information asymmetry Consumer education Direct costing Marginal pricing sug: subj: Prices Information asymmetry Consumer education Direct costing Marginal pricing keyword: addiction habit formation naivety non‐linear pricing addiction habit formation naivety non‐linear pricing ab: This article analyses how consumers' habit formation and addiction affect firms' pricing policies. I consider both sophisticated consumers, who realize that their current consumption will affect future tastes, and "naive" consumers, who do not. The optimal contract for sophisticated consumers is a two‐part tariff. The main result is that the optimal pricing pattern when the consumer is naive is a "bargain then rip‐off" contract, namely a fixed fee, with the first units priced below cost, and then priced above marginal cost. This holds both under symmetric and asymmetric information about the consumers' degree of sophistication. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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