Nonlinear prices, homogeneous goods, search

Arbeitspapier

We analyze competition on nonlinear prices in homogeneous goods markets with consumer search. In equilibrium firms offer two-part tariffs consisting of a linear price and lump-sum fee. The equilibrium production is socially efficient as the linear price of equilibrium two-part tariffs equals to the production marginal cost. Firms thus compete in lump-sum fees, which are dispersed in equilibrium. We show that sellers enjoy higher profit, whereas consumers are worse-off with two-part tariffs than with linear prices. The competition softens because with two-part tariffs firms can make effective per-consumer demand less elastic than the actual demand.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 21-092

Classification and Topics

• Classification: Wirtschaft ; Consumer Economics: Theory ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness ; Oligopoly and Other Imperfect Markets
• Subject: Nonlinear prices ; consumer search ; homogeneous goods

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Atayev, Atabek
• Event: Veröffentlichung
• (who): ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
• (where): Mannheim
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/247701
• Last update: 10.03.2025, 11:44 AM CET