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| Author: | Nahata, B. Ostaszewski, K. Sahoo, P. |
| Title: | Buffet pricing |
| Journal: | Journal of Business
1999 : APR, VOL. 72:2, p. 215-228 |
| Index terms: | Economic theory Tariffs Price policy Consumers USA |
| Freeterms: | Utility |
| Language: | eng |
| Abstract: | The article analyzes a commonly used pricing practice, It is herein called "buffet pricing," in which for fixed entry fee consumers can consume an unlimited quantity during a specified period of time. When consumers are homogeneous in preferences, this form of pricing can be more profitable than a two-part tariff if the total cost under a two-part tariff is greater than the "net" total cost under buffet pricing. For heterogeneous consumers, depending on the distribution of consumer types and the relative magnitudes of transaction and production costs, buffet pricing can also be more profitable than two-part tariffs. |
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