eprintid: 17322
rev_number: 25
eprint_status: archive
userid: 600
dir: disk0/00/01/73/22
datestamp: 2009-10-21 14:52:47
lastmod: 2015-07-23 09:37:35
status_changed: 2009-10-21 14:52:47
type: article
metadata_visibility: show
item_issues_count: 0
creators_name: Eliaz, K.
creators_name: Spiegler, R.
creators_id: 
creators_id: RSPIE69
title: Consumer optimism and price discrimination
ispublished: pub
subjects: 12000
divisions: F24
keywords: Contracts, speculative trade, screening, non-common priors, mechanism-design, optimism, three-part tariffs
note: Copyright 2008 Kfir Eliaz and Ran Spiegler. Reproduced under the Creative Commons Attribution - Non Commercial License 3.0
abstract: We study monopolistic design of a menu of non-linear tariffs when consumers have biased prior beliefs regarding their future preferences. In our model, consumers are "optimistic'' if their prior belief assigns too much weight to states of nature characterized by large gains from trade. A consumer's degree of optimism is his private information, and the monopolist employs the menu of non-linear tariffs to screen it. We characterize the optimal menu and show that the existence of non-common priors has significant qualitative implications for price discrimination and ex-post inefficiency. Finally, the characterization enables us to interpret aspects of real-life menus of non-linear tariffs.
date: 2008-12
official_url: http://econtheory.org/ojs/index.php/te/article/view/20080459
vfaculties: VSHS
oa_status: green
language: eng
primo: open
primo_central: open_green
lyricists_name: Spiegler, R
lyricists_id: RSPIE69
full_text_status: public
publication: Theoretical Economics
volume: 3
number: 4
pagerange: 459-497
refereed: TRUE
issn: 1555-7561
citation:        Eliaz, K.;    Spiegler, R.;      (2008)    Consumer optimism and price discrimination.                   Theoretical Economics , 3  (4)   pp. 459-497.          Green open access   
 
document_url: https://discovery.ucl.ac.uk/id/eprint/17322/1/17322.pdf