Publication at Faculty of Social Sciences, Faculty of Mathematics and Physics, Centre for Economic Research and Graduate Education |
2010
Abstract
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 three-part pricing schemes (i.e. fixed fee, included units, extra-unit price).
The analysis suggests a strong bias towards the pricing scheme with the number of included units equal to the expected demand.