Operations, Information and Decisions Papers

Document Type

Journal Article

Date of this Version

6-2012

Publication Source

Marketing Letters

Volume

23

Issue

2

Start Page

423

Last Page

438

DOI

10.1007/s11002-012-9187-0

Abstract

This article outlines recent methods and applications directed at understanding the profit and consumer welfare implications of increasingly prevalent price discrimination strategies in the service sector. These industries are typically characterized by heterogeneity in consumers’ valuation and usage of the service, resale constraints, and a focus on price as the service’s key attribute. The article focuses on how firms use nonlinear pricing or bundling strategies to benefit from the heterogeneity in consumer demand. We describe the basic economic model commonly used in the literature to analyze such strategic choices and present recent methodological improvements to this benchmark. A discussion of existing applications and future research opportunities concludes the article.

Copyright/Permission Statement

The final publication is available at Springer via http://dx.doi.org/10.1007/s11002-012-9187-0

Keywords

nonlinear pricing, bundling, service industries

Share

COinS
 

Date Posted: 27 November 2017

This document has been peer reviewed.