This article discusses the corrupt official and entrepreneurs. When entrepreneurs want to operate in the market, they have to purchase license from the official. In two-stage model, the official can take different prices of different types of entrepreneurs, and commits to his demand. We get the optimal demands of the official and critical types of entrepreneurs. In the framework with the shadow economy, the official is forced to decrease his demands. By examining the optimal demands and critical types, we found that the official¡¦s benefits decrease in the shadow economy.

This article examines whether price discrimination affects consumer price perceptions and emotions. Questionnaires involving various purchasing scenarios indicate that all kinds of price discrimination decrease the internal reference price of those who have to pay the original (higher) price. These effects of price discrimination on consumers¡¦ internal reference price are moderated by the discount depth. The deeper discount that the seller offers to the consumers, the larger the internal reference decreases. Further, when subjects were told that there is one consumer buy the product or service at the lower price (enjoying the price discount), they have negative emotion if they can have spend time looking for price-off coupons. But the other price discrimination such as VIP discount does not elicit consumers¡¦ negative emotion.

Richard Schmalensee. / "January 1980." / Bibliography: p. 10.

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Recommender systems are ubiquitously used by online vendors as profitable tools to boost sales and enhance the purchase experience of their consumers. In recent literature, the value created by recommender systems are discussed extensively. In contrast, few researchers look at the negative side of the recommender systems from the viewpoint of policymakers. To fill this gap, I critically investigate the welfare impact of recommender systems (RSs) during my Ph.D. study. The main focus of my Ph.D. dissertation is analyzing whether there exists a conflict of interest between the recommendations provider and its consumers in the electronic marketplace. My dissertation is composed of three parts. In Part I, I evaluate empirically whether in the real world, the profit-driven firm will choose a recommendation mechanism that hurts or is suboptimal to its consumers. In Part II, I analyze the role of personalization technology in the RSs from a unique perspective of how personalization resembles price discrimination as a profitable tool to exploit consumer surplus. In part III, I investigate the vendor’s motivation to increase the level of personalization in two-period transactions. As the RSs are designed by the firm, and the firm’s objective is to maximize profits, the RSs might not maximize consumers’ welfare. In Part I of my thesis work, I test the existence of such a conflict of interest between the firm and its consumers. I explore this question empirically with a concrete RS created by our industry collaborator for their Video-on-Demand (VoD) system. Using a large-scale dataset (300,000 users) from a randomized experiment on the VoD platform, I simulate seven RSs based on an exponential demand model with listed movie orders and prices as key inputs, estimated from the experimental dataset. The seven simulated RSs differ by the assignments of listed orders for selected recommended movies. Specifically, assignments are chosen to maximize profits, consumer surplus, social welfare, popularity (IMDB votes and IMDB ratings), and previous sales, as well as random assignments. As a result, the profit-driven recommender system generates 8% less consumer surplus than the consumer-driven RSs, providing evidence for a conflict of interest between the vendor and its consumers. Major e-vendors personalize recommendations by different algorithms that depend on how much and types of consumer information obtained. Therefore, the welfare evaluations of personalized recommendation strategies by empirical methods are hard to generalize. In Part II of my thesis, I base my analysis of personalization in RSs on a conceptual approach. Under an analytic framework of horizontal product differentiation and heterogenous consumer preferences, the resemblance of personalization to price discrimination in welfare properties is presented. Personalization is beneficial to consumers when more personalization leads to more adoption of recommendations, since it decreases search costs for more consumers. However, when the level surpasses a threshold when all consumers adopt, a more personalized RS decreases consumer surplus and only helps the firm to exploit surplus from consumers. The extreme case of perfect personalization generates the same welfare results as first-degree price discrimination where consumers get perfectly fit recommendations but are charged their willingness-to-pay. As shown in Part II, personalization is always profitable for the monopoly seller. In Part III, I investigate the vendor’s motivation to increase the level of personalization in a two-period transactions. In the first period, consumers do not observe the true quality of the recommendations and choose to accept recommended products or not based on their initial guesses. In the second period, consumers fully learn the quality. The settings of consumer uncertainty and consumer learning incentivize the firm to charge lower-than-exploiting price for recommendations to ensure consumers’ first-period adoptions of the RS. Therefore, uncertainties mediate the conflicts of interest from the vendor’s exploitive behavior even though the vendor might strategically elevate consumers’ initial evaluation to reduce such effect.

This paper presents an example of price discrimination on the market for marijuana in northern Bohemia in 2006. First, a model for a multifirm market is built, with emphasis on the existence of two types of firms and two qualities good offered. It is shown that in the case of a dealer of two qualities of marijuana there is an incentive to raise the price of the more expensive quality and reduce the price of the cheaper. Using econometric estimates, price discrimination is found in accordance with the predictions of the model in the amount of about 50 crowns per gram.

This dissertation analyzes the men's razor market to examine whether a monopolist can implement price discrimination for the complementary goods. I estimate a demand system for razors using the random coefficient logit model with market level sales data from the Nielsen Store Scanner dataset and individual demographic data from the March CPS. The estimated parameters are used to construct price-cost markups. By comparing the markups of different products, I find evidence that Gillette uses a two-part tariff strategy. This conclusion can be generalized as that of a monopolist setting the prices of tie-in products consistent with a two-part tariff.

The purpose of this thesis is to investigate the competition structure in the market for crossing Øresund and which price setting techniques are used. The results show that the market for crossing Øresund Bridge is monopolistically competitive market. While Øresund Bridge can in some cases be seen as a monopoly. Furthermore the results show how the firms that are operating in the market offer their consumers various pricing schedules to self-select from. The results based upon the information collected found that Øresund Bridge uses price discriminatory pricing schedules such as two-part tariff, quantity discount and peak-load pricing. According to the theory of price discrimination the firm needs to have market power in order to price discriminate and it is found that Øresund Bridge have a market share of 76%. The negative consequences of price discrimination in the particular market can mostly be seen in the ferry market where the two largest firms have to start collaborating in order to sustain as a part of the market. The positive consequences is found to be that a wider range of consumer groups are able to travel over Øresund due to the extensive range of different prices offered by the market operators.

This dissertation investigates the effect of market concentration on nonlinear pricing strategies in the airline industry. The study develops a theoretical nonlinear pricing model with both discrete product and consumer types to derive testable implications about the impact of market concentration on the structure of relative prices within a menu of prices. The analysis then uses a unique, airline ticket level data set to test the model predictions. The data set consists of a representative sample of airline tickets purchased between June and December 2004 from one major Computer Reservation System (CRS), for travel in the fourth quarter of the same year. The study restricts attention to 246 domestic routes in the United States, resulting in 878,169 tickets. This unique data set allows us to examine the effect of market structure conditions on relative prices within a menu of fare types with restrictive ticket characteristics. The analysis also contributes to the understanding of how the level of competition in a market affects the dispersion of airline prices. The results indicate that market concentration differentially impacts high versus low priced fares, as predicted by the theoretical model. More specifically, there is a decrease in the ratio of high- to low-quality fares as markets become more concentrated, after controlling for numerous factors that may affect prices through costs and market characteristics. The ratio of medium- to low-quality fares, however, increases with less competition. From a welfare perspective, it is interesting to observe that not all travelers are affected in the same way by a decrease in the level of competition. Business travelers, who purchase high priced fares, end up paying relatively lower prices in more concentrated markets while leisure travelers pay more.

In recent years, mobile phone service has become the most popular term of telecommunication service. However, in back of the complex pricing plans and promotion plans, there are some interesting tropics. For example, how does a mobile phone service operator price the on-net and off-net charges? What is the factor that makes the off-net charges more expensively than the on-net one? And which principle is adopted to design the multiple pricing plans by the operators? In this study, we will make some amendment for the Hotelling Model, and set a new model which be called the Psychological Differential Model, that can expectably explain the eventuality which a man has a lot of phone number from different operators simultaneously. Besides, it will add a factor which will derogate the network externalities of the utility of mobile phone service. Mathematically, we use the way of ¡§Two-stage Market Pricing¡¨ to develop the equilibrium of on-net and off-net charges. By the cost pricing method, we can find the access fee will cause off-net charges more expensively than on-net one in the chapter three of this paper. Finally, in the chapter four, this study will introduce the principle of the third price discrimination to explain the outcome of multiple pricing plans.