Begin: Monday, 20. of May 2019 (1:00 PM)
Location: Warburger Str. 100, room Q4.245
On May 20, 2019, Prof. Dr. Tobias Wenzel from the University of Sheffield, UK, will give a talk on “Complex pricing and consumer-side attention”.
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.