Every shroud has a silver lining: The visible benefits of hidden surcharges

David de Meza and Diane Reyniers

Economics Letters, 2012, vol. 116, issue 2, 151-153

Abstract: Opportunities for shrouded pricing drive down upfront price as firms compete to capture new customers. Unless the surcharge is sufficiently high, consumers are worse off if the practice is banned, assuming Cournot–Nash equilibrium and isoelastic demand.

Keywords: Shrouded prices; Waterbedding; Consumer protection (search for similar items in EconPapers)
JEL-codes: D40 D60 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:116:y:2012:i:2:p:151-153

DOI: 10.1016/j.econlet.2012.02.027

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