Abstract and Keywords
Nonlinear pricing is the phrase used to describe pricing schemes in which the price is not strictly proportional to the amount purchased (hence nonlinear). It is a tactic that is widely used in many industries. This article describes direct and indirect price discrimination methods such as bundling, quantity discounts, Ramsey pricing, priority pricing, efficient rationing, and pricing through quality (product attribute) differentiation and self-selection. It also covers nonlinear pricing applications in different industries such as electric power and telecommunications.
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