• Corpus ID: 233324143

Nonlinear Pricing with Misspecified and Arbitrary Perception of the Marginal Price

  title={Nonlinear Pricing with Misspecified and Arbitrary Perception of the Marginal Price},
  author={Diego Alejandro Murillo Taborda},
  journal={arXiv: General Economics},
  • D. Taborda
  • Published 20 April 2021
  • Economics
  • arXiv: General Economics
In the context of nonlinear prices, the empirical evidence suggests that the consumers have cognitive biases represented in a limited understanding of nonlinear price structures, and they respond to some alternative perceptions of the marginal prices. In particular, consumers usually make choices based more on the average than the marginal prices, which can result in a suboptimal behavior. Taking the misspecification in the marginal price as exogenous, this document analyzes how is the optimal… 

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