| Warburger Str. 100, room Q4.245
On December 17, 2018, Prof. Dr. Tobias Wenzel will give a talk about "Complex pricing and consumer-side attention" in the context of the SFB 901.
We analyze a situation in which two horizontally differentiated firms compete in two-part tariffs (i.e., a linear and fixed price), and some consumers are not fully informed about or ignore the linear per-unit price. Firms may offer a menu of such two-part contracts. We analyze two policy interventions which have been introduced in real markets: (i) abolishment of linear fees, i.e., a reduction in tariff complexity, and (ii) diminishing the range of contracts, i.e., a reduction in the number of two-part tariffs offered. We provide a characterisation of these policy interventions and study the effects on consumers, firms, and total welfare.