Nonlinear Pricing with Self-Control Preferences
Matthew Shum (),
Susanna Esteban () and
Eiichi Miyagawa
Economics Working Paper Archive from The Johns Hopkins University,Department of Economics
Abstract:
This paper studies optimal nonlinear pricing for a monopolist when consumers' preferences exhibit temptation and self-control as in Gul and Pesendorfer (2001a). Consumers are subject to temptation inside the store but exercise self-control, and those foreseeing large self-control costs do not enter the store. Consumers differ in their preferences under temptation. When all consumers are tempted by more expensive, higher quality choices, the optimal menu is a singleton, which saves consumers from self-control and extracts consumers' commitment surplus. When some consumers are tempted by cheaper, lower quality choices, the optimal menu may contain a continuum of choices.
Date: 2003-09
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Citations: View citations in EconPapers (21)
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Journal Article: Nonlinear pricing with self-control preferences (2007) 
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Persistent link: https://EconPapers.repec.org/RePEc:jhu:papers:503
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