Mixing Goods with Two-Part Tariffs | Zendy

Steffen Hoernig | Zendy; Tommaso Valletti | Zendy

AI Assistant Blog Pricing

Home ZAIA Blog

Open Access

Mixing Goods with Two-Part Tariffs

Author(s) -

Steffen Hoernig,

Tommaso Valletti

Publication year - 2006

Publication title -

ssrn electronic journal

Language(s) - English

Resource type - Journals

ISSN - 1556-5068

DOI - 10.2139/ssrn.934533

Subject(s) - mixing (physics) , tariff , pareto principle , business , price discrimination , economics , microeconomics , commerce , international economics , operations management , physics , quantum mechanics

We consider a market where consumers mix content offered by different firms. We show how tariff structures have an impact on firms' profits and efficiency. As compared to pure linear pricing, when firms charge two-part tariffs they make higher profits, while consumers are worse off and the allocation is not first-best since too little mixing occurs. Flat subscription fees make mixing unattractive and are Pareto-dominated by all the other types of tariffs.

The content you want is available to Zendy users.

Already have an account? Click here to sign in.

Having issues? You can contact us here

Accelerating Research