This paper shows how an airline monopoly uses refundable and non-refundable tickets to screen consumers who are uncertain about their travel. Our theoretical model predicts that the difference between these two fares diminishes as individual demand uncertainty is resolved. Using an original data...

We develop a model to derive an optimal price for a bundle of two goods when buyers are risk averse and uncertain about the valuation of each good. In theory, the optimal bundle price depends not only on the probability of a positive valuation of each good, but also on the correlation between...