Evaluating Welfare with Nonlinear Prices / Peter C. Reiss, Matthew W. White.

Format:

Book

Author/Creator:

Reiss, Peter C.

Contributor:

National Bureau of Economic Research.

White, Matthew W.

Series:

Working Paper Series (National Bureau of Economic Research) no. w12370.

NBER working paper series no. w12370

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2006.

Summary:

This paper examines how to evaluate consumer welfare when consumers face nonlinear prices. This problem arises in many settings, such as devising optimal pricing strategies for firms, assessing how price discrimination affects consumers, and evaluating the efficiency costs of many transfer programs in the public sector. We extend prior methods to accommodate a broad range of modern pricing practices, including menus of pricing plans. This analysis yields a simpler and more general technique for evaluating exact consumer surplus changes in settings where consumers face nonlinear prices. We illustrate our method using recent changes in mobile phone service plans.

Notes:

Print version record

July 2006.