Multi-dimensional Virtual Values and Second-degree Price Discrimination

Package size and price discrimination in the paper towel market

Estimates from a structural model of consumer behavior and firm conduct are used to decompose the extent to which quantity discounts for paper towels are consistent with second degree price discrimination as opposed to cost differences across sizes. Counterfactual exercises assuming that firms offer only one package size or charge uniform prices across sizes indicate that competition in the mul...

The Impact of CSR and Semi-TDPD on Price-Based Revenue Sharing Contract

We develop a new coordination contract of manufacturer-retailer in a distribution system. A revenue sharing contract based on retail price is modelled, which is more practical to handle channel conflict. We also integrate two concepts of CSR (Corporate Sociality Responsible) and Semi-TDPD (Semi Third Degree Price Discrimination) into our model. Semi-TDPD strategy makes it possible to exploit th...

Second degree price discrimination

Modelling the Heterogeneous Price Setting Behavior of Firms (DSGE Approach)

Despite the empirical evidence of the difference in the degree of price stickiness of goods and services, in the new standard Keynesian models, the same price stickiness is considered for all firms producing intermediate goods. In recent years, a new generation of pricing models has been introduced to simulate the heterogeneous price setting behavior in which, unlike standard pricing models, th...

Price discrimination through communication

We study a seller’s optimal mechanism for maximizing revenue when a buyer may present evidence relevant to her value. We show that a condition very close to transparency of buyer segments is necessary and sufficient for the optimal mechanism to be deterministic–hence akin to classic third degree price discrimination–independently of non-evidence characteristics. We also find another sufficient ...