We consider second-degree price discrimination for two types of consumers. When the net-of-cost valuation functions cross at least once at some positive quantity, it is always optimal to serve both types of consumers. Moreover, the type with the higher valuation peak always gets the socially...

This pedagogical note explains how the same basic principle can be applied to explain the profit-maximizing behavior of a monopolist under both linear and nonlinear pricing by introducing an average price function. It is shown that optimal conditions under nonlinear pricing are similar to that...

Using a game theoretic framework, we show that not only can pay-what-you-want pricing generate positive profits, but it can also be more profitable than charging a fixed price to all consumers. Further, whenever it is more profitable, it is also Pareto-improving. We derive conditions in terms of...

This article analyzes a commonly used pricing practice, which we call quot;buffet pricing,quot; in which for a fixed entry fee consumers can consume an unlimited quantity during a specified period of time. When consumers are homogeneous in preferences, this form of pricing can be more profitable...