Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/27608
Authors: 
Inderst, Roman
Peitz, Martin
Year of Publication: 
2008
Series/Report no.: 
ZEW Discussion Papers 08-125
Abstract: 
We characterize a monopolist's optimal offer of service plans when only informed customers know already at the contracting stage whether their demand is high or low, while uninformed customers may learn their demand only after incurring some costs, if at all. While informed customers purchase simpler tariffs, those who are still uninformed purchase tariffs that subsequently allow them to more flexibly adjust their consumed quantity of the service. The presence of uninformed costumers makes it more costly for the firm, in terms of rent left to consumers, to offer the most basic package, which is purchased by informed low-demand customers. Consequently, the firm makes this package relatively unattractive, resulting in a very low quantity of the consumed service. We find that uninformed customers benefit from the presence of informed customers, even though information only helps to predict a customer's own demand. However, welfare may be lower if there are more informed customers or if acquiring information already at the contracting stage becomes less costly for uninformed customers.
Subjects: 
Nonlinear Pricing
Price discrimination
Information acquisition
Document Type: 
Working Paper

Files in This Item:
File
Size
407.42 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.