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Two-Part Tariffs and Monopoly Profits When Visits Are Variable

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Author Info
Owen R. Phillips
Raymond C. Battalio
Abstract

A two-part tariff exists when a fixed payment is made before any purchases are allowed. When buyers visit a monopolist more than once per period, they have the ability to substitute between visits and consumption per visit. This substitution weakens the surplus-extracting power of a two-part tariff; and in some cases it is more profitable to abandon the entry fee altogether.

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Publisher Info
Article provided by The RAND Corporation in its journal Bell Journal of Economics.

Volume (Year): 14 (1983)
Issue (Month): 2 (Autumn)
Pages: 601-604
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Handle: RePEc:rje:bellje:v:14:y:1983:i:autumn:p:601-604

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