Nonlinear pricing with self-control preferences

Arbeitspapier

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 differ 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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 503

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Monopoly ; Asymmetric and Private Information; Mechanism Design ; Monopoly; Monopolization Strategies ; Information and Product Quality; Standardization and Compatibility
• Subject: Temptation ; self-control ; commitment ; nonlinear pricing ; price discrimination. ; Betriebliche Preispolitik ; Präferenztheorie ; Preisdifferenzierung ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Esteban, Susanna ; Miyagawa, Eiichi ; Shum, Matthew
• Event: Veröffentlichung
• (who): The Johns Hopkins University, Department of Economics
• (where): Baltimore, MD
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/71981
• Last update: 10.03.2025, 11:43 AM CET