Monopolistic nonlinear pricing with consumer entry

• 成果类型: Article
• 署名作者: Ye, Lixin; Zhang, Chenglin
• 署名单位: University System of Ohio; Ohio State University; Southwestern University of Finance & Economics - China
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1933-6837
• DOI: 10.3982/TE1944
• 发表日期: 2017-01-01
• 页码: 141-173
• 关键词: Monopoly; nonlinear pricing; information acquisition; consumer entry; quality distortion; market exclusion

摘要

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 distortion and market exclusion are reduced, sorting is more likely, and whenever bunching occurs, the bunching interval is necessarily smaller. Additionally, under certain conditions the monopoly solution may even achieve the first best (i.e., production efficiency). We also demonstrate that the optimal monopoly solutions can be ranked according to inverse hazard rate functions of the entry cost, which suggests an interesting dynamic for monopolistic nonlinear pricing with consumer entry.