Optimal Nonlinear Pricing, Bundling Commodities and Contingent Services

Marion Podesta () and Jean-Christophe Poudou

Cahiers du CREDEN (CREDEN Working Papers) from CREDEN (Centre de Recherche en Economie et Droit de l'Energie), Faculty of Economics, University of Montpellier 1

Abstract: In this paper, we propose to analyze optimal nonlinear pricing when a firm offers in a bundle a commodity and a contingent service. The paper studies a mechanism design where all private information can be captured in a single scalar variable in a monopoly context. We show that to propose the package for commodity and service is less costly for the consumer, the firm has lower consumers rent than the situation where it sells their good and contingent service under an independent pricing strategy. In fact, the possibility to use price discrimination via the supply of package is dominated by the fact that it is costly for the consumer to sign two contracts. Bundling energy and a contingent service is a profitable strategy for a energetician monopoly practising optimal nonlinear tariff. We show that the rates of the energy and the contingent service depend to the optional character of the contingent service and depend to the degree of complementarity between commodities and services.

Keywords: Bundling; Nonlinear pricing; Energy market (search for similar items in EconPapers)
JEL-codes: D42 L12 Q4 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2008
New Economics Papers: this item is included in nep-com, nep-cta, nep-ene, nep-mic and nep-mkt
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Optimal Nonlinear Pricing, Bundling Commodities and Contingent Services (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:mop:credwp:08.04.76

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