Monopolistic Two-Part Pricing Arrangements

A Taxonomy of Monopolistic Pricing

Textbooks present the three ‘degrees’ of price discrimination as a sequence of independent pricing methods. These textbook treatments consequently provide inadequate insight as to when a firm might adopt a particular pricing strategy. The paper describes an informationbased taxonomy of price discrimination, which can be used to teach monopolistic price discrimination in an integrated way. The p...

Monopolistic Nonlinear Pricing with Costly Information Acquisition∗

We consider costly information acquisition in the canonical monopolistic nonlinear pricing model (Mussa and Rosen, 1978; Maskin and Riley, 1984) so that consumers need to incur privately known entry costs in order to learn their preference “intensities” for the quality of the product. We show that by taking into account costly information acquisition, the nature of optimal nonlinear pricing con...

Monopolistic nonlinear pricing with consumer entry

We consider consumer entry in the canonical monopolistic nonlinear pricing model (Mussa and Rosen, 1978) wherein consumers learn their preference “types” after incurring privately known entry costs. We show that by taking into account consumer entry, the nature of optimal nonlinear pricing contracts changes significantly: compared to the benchmark without costly entry, in our model both quality...

Two-Part Pricing with Costly Arbitrage

This paper considers the optimal two-part pricing strategy of a monopolist whose customers collude when they purchase the firm's product. In contrast to the sentiment in the existing price discrimination literature, I find that a monopolist's profit can actually increase when consumers share its good. When transaction costs for collusion are zero the firm can extract the full consumer surplus t...

Judging Monopolistic Pricing: F/RAND and Antitrust Injury