Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/247701 
Authors: 
Year of Publication: 
2021
Series/Report no.: 
ZEW Discussion Papers No. 21-092
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
We analyze competition on nonlinear prices in homogeneous goods markets with consumer search. In equilibrium firms offer two-part tariffs consisting of a linear price and lump-sum fee. The equilibrium production is socially efficient as the linear price of equilibrium two-part tariffs equals to the production marginal cost. Firms thus compete in lump-sum fees, which are dispersed in equilibrium. We show that sellers enjoy higher profit, whereas consumers are worse-off with two-part tariffs than with linear prices. The competition softens because with two-part tariffs firms can make effective per-consumer demand less elastic than the actual demand.
Subjects: 
Nonlinear prices
consumer search
homogeneous goods
JEL: 
D11
D43
D83
L13
Document Type: 
Working Paper

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