Optimal pricing scheme for addictive goods

• 成果类型: Article
• 署名作者: Triviza, Eleftheria
• 署名单位: University of Mannheim
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12486
• 发表日期: 2024
• 页码: 603-626
• 关键词: self-control; mobile phone; monopoly; demand; CONSEQUENCES; naivete

摘要

This article analyses how consumers' habit formation and addiction affect firms' pricing policies. I consider both sophisticated consumers, who realize that their current consumption will affect future tastes, and naive consumers, who do not. The optimal contract for sophisticated consumers is a two-part tariff. The main result is that the optimal pricing pattern when the consumer is naive is a bargain then rip-off contract, namely a fixed fee, with the first units priced below cost, and then priced above marginal cost. This holds both under symmetric and asymmetric information about the consumers' degree of sophistication.