We compare second-degree price discrimination with uniform pricing using two linear demands. Our comparison shows that second-degree price discrimination can result in a welfare-enhancing market foreclosure (both markets are served under uniform pricing but one of them is excluded under...

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 paper investigates the viability of Pay-What-You-Want (PWYW) pricing when firms compete without restrictions of a minimum payment requirement. We show that the equilibrium outcomes are different when underpayers, consumers paying less than marginal cost, are present as opposed to when they...

By focusing on the two intercepts — the price and quantity intercepts — of inverse linear demands, this note shows that compared to uniform pricing, third-degree price discrimination can be neutral. When all price intercepts of sub-markets' inverse demands are the same, not only will all the...

We question the prevailing wisdom that a profit-maximizing monopolist using linear pricing cannot produce socially efficient output. We show that when market demand function exhibits a flat portion, the prevailing wisdom may not be true. Such a flat portion in demand is consistent with weakly...

We analyze mixed bundling in two-sided markets where installed base effects are present and find that the pricing structure deviates from traditional bundling as well as the standard two-sided markets literature - we determine prices on both sides fall with bundling. Mixed bundling acts as a...

A three-part tariff refers to a pricing scheme consisting of a fixed fee, a free allowance of units up to which the marginal price is zero, and a positive per-unit price for additional demand beyond that allowance. The three-part tariff and its variations are commonly used in both final-goods...