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Risk-Averse Firms and Two-Part Tariffs under Uncertainty
Yin, Xiangkang - 2008
This paper studies two-part tariffs with explicit consideration of cost uncertainty and risk aversion. It finds that firms charge a risk premium over expected marginal cost for each unit they sell. This pricing rule is socially optimal if and only if the modeled market is fully covered in...
Persistent link: https://www.econbiz.de/10012722618
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Uncertainty and Entry Deterrence
Maskin, Eric - 2010
We study a model where capacity installation by an incumbent firm serves to deter others from entering the industry. We argue that uncertainty about demand or costs forces the incumbent to choose a higher capacity level than it would under certainty. This higher level diminishes the...
Persistent link: https://www.econbiz.de/10014184260
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Beyond the Privacy Paradox : Objective versus Relative Risk in Privacy Decision Making
Adjerid, Idris; Peer, Eyal; Acquisti, Alessandro - 2021
Privacy decision making has been examined from various perspectives. A dominant “normative” perspective has focused on … decision research to construe privacy decision making as a process in which cognitive heuristics and biases predictably occur … settings. Our results suggest a way to integrate diverse streams of IS literature on privacy decision making: consumers may …
Persistent link: https://www.econbiz.de/10013323187
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Risks Involved with CBDCs : On Cash, Privacy, and Information Centralization
Schilling, Linda - 2019
A central bank digital currency (CBDC) is planned to be a direct deposit a citizen has in the central bank. CBDC is supposed to be backed by central bank assets, to be purely digital, it can be private or non-private, it may or may not replace cash and can compete with bank deposits. CBDC is the...
Persistent link: https://www.econbiz.de/10012860160
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Uncertain Demand, Consumer Loss Aversion, and Flat-Rate Tariffs
Herweg, Fabian; Mierendorff, Konrad - 2011
We consider a model of firm pricing and consumer choice, where consumers are loss averse and uncertain about their future demand. Possibly, consumers in our model prefer a flat rate to a measured tariff, even though this choice does not minimize their expected billing amount - a behavior in line...
Persistent link: https://www.econbiz.de/10014184126
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Capacity Choice under Uncertainty with Product Differentiation
Behrens, Christiaan - 2012
This article analyses the capacity-then-price game for a duopoly market. We add to the literature by explicitly taking product differentiation into account. We study the impact of capacity costs, demand uncertainty, and vertical and horizontal product differentiation on equilibrium capacities,...
Persistent link: https://www.econbiz.de/10013098833
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Uncertain demand, consumer loss aversion, and flat-rate tariffs
Herweg, Fabian - 2010
The 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...
Persistent link: https://www.econbiz.de/10003987825
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Uncertain demand, consumer loss aversion, and flat-rate tariffs
Herweg, Fabian; Mierendorff, Konrad - 2011
The 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...
Persistent link: https://www.econbiz.de/10009236785
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Uncertain demand, consumer loss aversion, and flat-rate tariffs
Herweg, Fabian; Mierendorff, Konrad - 2011
We consider a model of firm pricing and consumer choice, where consumers are loss averse and uncertain about their future demand. Possibly, consumers in our model prefer a flat rate to a measured tariff, even though this choice does not minimize their expected billing amount - a behavior in line...
Persistent link: https://www.econbiz.de/10009739169
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Uncertain demand, consumer loss aversion, and flat-rate tariffs
Herweg, Fabian - 2010
The 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...
Persistent link: https://www.econbiz.de/10008822064