Publication: Nonlinear Pricing with Self-Control Preferences
Loading...
Identifiers
Publication date
2003
Defense date
Advisors
Tutors
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
This paper studies optimal nonlinear pricing for a monopolist when consumers' preferences exhibit temptation and self-control as in Gul and Pesendorfer (2001a). Consumers are subject to temptation inside the store but exercise self-control, and those foreseeing large self-control costs do not enter the store. Consumers di®er in their preferences under temptation. When all consumers are tempted by more expensive, higher quality choices, the optimal menu is a singleton, which saves consumers from self-control and extracts consumers' commitment surplus. When some consumers are tempted by cheaper, lower quality choices, the optimal menu may contain a continuum of choices.
Description
Keywords
Temptation, Self-control, Commitment, Nonlinear pricing, price discrimination