Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/38800 
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dc.contributor.authorHerweg, Fabianen
dc.date.accessioned2010-07-26-
dc.date.accessioned2010-08-17T12:28:14Z-
dc.date.available2010-08-17T12:28:14Z-
dc.date.issued2010-
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
dc.language.isoengen
dc.publisher|aUniversity of Bonn, Bonn Graduate School of Economics (BGSE) |cBonnen
dc.relation.ispartofseries|aBonn Econ Discussion Papers |x14/2010en
dc.subject.jelD11en
dc.subject.jelD43en
dc.subject.jelL11en
dc.subject.ddc330en
dc.subject.keywordConsumer Loss Aversionen
dc.subject.keywordFlat-Rate Tariffsen
dc.subject.keywordNonlinear Pricingen
dc.subject.keywordUncertain Demanden
dc.subject.stwBetriebliche Preispolitiken
dc.subject.stwPreisdifferenzierungen
dc.subject.stwKonsumentenverhaltenen
dc.subject.stwRisikoaversionen
dc.subject.stwNachfrageen
dc.subject.stwRisikoen
dc.subject.stwTheorieen
dc.titleUncertain Demand, Consumer Loss Aversion, and Flat-Rate Tariffs-
dc.type|aWorking Paperen
dc.identifier.ppn631987711en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen
dc.identifier.repecRePEc:zbw:bonedp:142010-

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