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dc.contributor.authorHerweg, Fabianen_US
dc.date.accessioned2010-07-26en_US
dc.date.accessioned2010-08-17T12:28:14Z-
dc.date.available2010-08-17T12:28:14Z-
dc.date.issued2010en_US
dc.identifier.urihttp://hdl.handle.net/10419/38800-
dc.description.abstractThe so called flat-rate bias is a well documented phenomenon caused by consumers' desire to be insured against fluctuations in their billing amounts. This paper shows that expectation-based loss aversion provides a formal explanation for this bias. We solve for the optimal two-part tariff when contracting with loss-averse consumers who are uncertain about their demand. The optimal tariff is a flat rate if marginal cost of production is low compared to a consumer's degree of loss aversion and if there is enough variation in the consumer's demand. Moreover, if consumers differ with respect to the degree of loss aversion, firms' optimal menu of tariffs typically comprises a flat-rate contract.en_US
dc.language.isoengen_US
dc.publisherGraduate School of Economics Bonnen_US
dc.relation.ispartofseriesBonn econ discussion papers 2010,14en_US
dc.subject.jelD11en_US
dc.subject.jelD43en_US
dc.subject.jelL11en_US
dc.subject.ddc330en_US
dc.subject.keywordConsumer Loss Aversionen_US
dc.subject.keywordFlat-Rate Tariffsen_US
dc.subject.keywordNonlinear Pricingen_US
dc.subject.keywordUncertain Demanden_US
dc.subject.stwBetriebliche Preispolitiken_US
dc.subject.stwPreisdifferenzierungen_US
dc.subject.stwKonsumentenverhaltenen_US
dc.subject.stwRisikoaversionen_US
dc.subject.stwNachfrageen_US
dc.subject.stwRisikoen_US
dc.subject.stwTheorieen_US
dc.titleUncertain demand, consumer loss aversion, and flat-rate tariffsen_US
dc.typeWorking Paperen_US
dc.identifier.ppn631987711en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:Bonn Econ Discussion Papers, Bonn Graduate School of Economics (BGSE), Universität Bonn

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