TY - JOUR
AU - Armstrong, Mark
AB - Determining the optimal selling strategy for a multiproduct firm facing consumers with unobservable tastes is a difficult task. This paper aims to show how almost optimal nonlinear tariffs can often be found when the number of products is large. Moreover, such tariffs take a simple form: (i) when taste parameters are independently distributed across products, the almost optimal tariff is a single cost-based two-part tariff which can extract virtually all consumer surplus; (ii) when tastes are correlated across products, perhaps because of income differences across consumers, the almost optimal tariff can be implemented as a menu of two-part tariffs each of which has prices proportional to marginal costs.
TI - Price Discrimination by a Many-Product Firm
JF - The Review of Economic Studies
DO - 10.1111/1467-937X.00082
DA - 1999-01-01
UR - https://www.deepdyve.com/lp/oxford-university-press/price-discrimination-by-a-many-product-firm-fvewOtesUc
SP - 151
EP - 168
VL - 66
IS - 1
DP - DeepDyve
ER -