Mixing Goods with Two-Part Tariffs

Steffen Hoernig and Tommaso Valletti

CEIS Research Paper from Tor Vergata University, CEIS

Abstract: We consider a market where consumers mix content offered by different firms. We show how tariff structures have an impact on firms' profits and efficiency. As compared to pure linear pricing, when firms charge two-part tariffs they make higher profits, while consumers are worse off and the allocation is not first-best since too little mixing occurs. Flat subscription fees make mixing unattractive and are Pareto-dominated by all the other types of tariffs.

Keywords: Two-part tariffs; flat fees; combinable products; pay-per-view (search for similar items in EconPapers)
JEL-codes: L13 L82 (search for similar items in EconPapers)
Pages: 24
Date: 2006-08-01
New Economics Papers: this item is included in nep-com, nep-mic and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Mixing goods with two-part tariffs (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:rtv:ceisrp:72

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