Tariff-specific preferences and their influence on price sensitivity
- For many services, consumers can choose among a range of optional tariffs that differ in their access and usage prices. Recent studies indicate that tariff-specific preferences may lead consumers to choose a tariff that does not minimize their expected billing rate. This study analyzes how tariff-specific preferences influence the responsiveness of consumers’ usage and tariff choice to changes in price. We show that consumer heterogeneity in tariff-specific preferences leads to heterogeneity in their sensitivity to price changes. Specifically, consumers with tariff-specific preferences are less sensitive to price increases of their preferred tariff than other consumers. Our results provide an additional reason why firms should offer multiple tariffs rather than a uniform nonlinear pricing plan to extract maximum consumer surplus.
Author: | Agnieszka WolkGND, Bernd SkieraORCiDGND |
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URN: | urn:nbn:de:hebis:30:3-863113 |
DOI: | https://doi.org/10.1007/BF03342716 |
ISSN: | 2198-2627 |
Parent Title (English): | Business research |
Publisher: | VHB |
Place of publication: | Göttingen |
Document Type: | Article |
Language: | English |
Date of Publication (online): | 2014/02/28 |
Year of first Publication: | 2010 |
Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
Release Date: | 2024/07/16 |
Tag: | flat rate; flat-rate bias; nonlinear pricing; pay-per-use bias; price elasticity; pricing; tariff choice; tariff-specific preferences; three-part tariffs |
Volume: | 3.2010 |
Issue: | 1 |
Page Number: | 11 |
First Page: | 70 |
Last Page: | 80 |
HeBIS-PPN: | 521123879 |
Institutes: | Wirtschaftswissenschaften / Wirtschaftswissenschaften |
Angeschlossene und kooperierende Institutionen / E-Finance Lab e.V. | |
Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
Sammlungen: | Universitätspublikationen |
Licence (German): | Creative Commons - CC BY - Namensnennung 4.0 International |