Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/227626
Authors: 
Fischer, Christian
Rasch, Alexander
Wenzel, Tobias
Year of Publication: 
2020
Series/Report no.: 
ZEW Discussion Papers No. 20-075
Abstract: 
This paper analyzes a market in which two horizontally differentiated firms compete by setting menus of two-part tariffs, and in which some consumers are not informed about the linear per-unit price component. We consider two regulatory interventions that limit firms' ability to price discriminate: (i) diminishing the range of contracts via a reduction in the number of two-part tariffs offered (which prohibits inter-group price discrimination), and (ii) a reduction in tariff complexity via the abolishment of linear fees (which prohibits inter- and intra-group price discrimination). We characterize the effects of these interventions on firm profits and (informed and uninformed) consumer welfare, and identify conditions for the optimal policy. Our results provide insights for the evaluation of recent policy interventions (e.g., the regulation of roaming charges in the EU market).
Subjects: 
Two-part tariffs
Consumer attention
Policy intervention
JEL: 
D43
L13
L42
Document Type: 
Working Paper

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