Discussion Paper
An Empirical Analysis of Optimal Nonlinear Pricing
Published: February 2023
Researchers examine both decisions to buy a product and amount of product purchased as a function of price point and price continuum.
Using data from an educational-services firm on past successful and unsuccessful deals, researchers apply their method of developing a full price schedule rather than a single price point. They find that applying this method, in the case of these data, indicates that an optimal nonlinear tariff would result in an increase in firm profits.