Standard price discrimination theories are based on the assumption that consumers use their future demand estimates to evaluate net utility of each pricing scheme and choose the scheme with the highest value. However, some evidence suggests that consumers might not always behave this way. The...

This paper uses experimental data to investigate possible biases in consumers' choice of pricing schemes when their demand is perfectly inelastic but uncertain. I consider threepart pricing schemes (i.e. fixed fee, included units, extra-unit price). The analysis suggests a strong bias towards...