RT Generic
T1 Optimal Menu of Menus with Self-Control Preferences
A1 Esteban, Susanna
A1 Miyagawa, Eiichi
A2 Columbia University, Department of Economics
AB This paper studies how a seller should design its price schedule when con-sumers' preferences are subject to temptation. As in Gul and Pesendorfer (2001),consumers exercise costly self-control to some degree and foresee their impulsivebehavior and self-control. Since consumers may pay a premium for an option setthat is less tempting, the seller may o®er multiple small menus. Building on thestandard model of adverse selection and second-degree price discrimination, wecharacterize the optimal menu of menus for the seller. In particular, we show thatif consumers are tempted by goods of higher quality, the seller can achieve perfectdiscrimination: consumers' choices appear as if the seller can observe consumers'preferences directly. To achieve this, the seller \decorates" menus by adding itemsthat are never chosen but are tempting to consumers.
YR 2004
FD 2004
LK https://hdl.handle.net/10016/4997
UL https://hdl.handle.net/10016/4997
LA eng
DS e-Archivo
RD 19 may. 2024