Multiproduct price discrimination with quantity limits: An application to zero-rating

Firat Inceoglu, Xingyi Liu

Research output: Contribution to journalArticle

Abstract

Zero-rating is a recent practice that allows internet providers to discriminate among contents. Focusing on the consumer side, we show that a monopolist provider may implement zero-rating in order to extract more surplus from consumers who have heterogeneous tastes for content. This is akin to the practice of quantity discounts with one difference: the monopolist screens consumer types by distorting not only the total consumption, but also the composition of consumption. Zero-rating may lead to an increase in network capacity and improve welfare.
Original languageEnglish
Pages (from-to)41-45
Number of pages5
JournalEconomics Letters
Volume180
Early online date10 Apr 2019
DOIs
Publication statusPublished - 1 Jul 2019

Keywords

  • Price discrimination
  • Quantity discounts
  • Zero rating

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