Nonlinear Pricing

Mark Armstrong

Annual Review of Economics, 2016, vol. 8, issue 1, 583-614

Abstract: I examine the use of nonlinear pricing as a method of price discrimination, both with monopoly and oligopoly supply. Topics covered include an analysis of when it is profitable to offer quantity discounts and bundle discounts, connections between second- and third-degree price discrimination, the use of market demand functions to calculate nonlinear tariffs, the impact of consumers with bounded rationality, bundling arrangements between separate sellers, and the choice of prices for quality upgrades and add-on products.

Keywords: price discrimination; nonlinear pricing; bundling; product line pricing; screening; discrete choice (search for similar items in EconPapers)
JEL-codes: D11 D21 D42 D86 L13 M31 (search for similar items in EconPapers)
Date: 2016
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Related works:
Working Paper: Nonlinear Pricing (2015)
Working Paper: Nonlinear Pricing (2015)
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