【正文】 2020 Pearson Education, Inc. Chapter 11 92 Advertising ?Assumptions ?Firm sets only one price for product ?Firm knows quantity demanded depends on price and advertising expenditure dollars, A Q(P,A) ?We can show the firm’s cost curves, revenue curves, and profits under advertising and no advertising 169。2020 Pearson Education, Inc. Chapter 11 90 Tying ?Allows the seller to meter the customer and use a twopart tariff to discriminate against the heavy user ?McDonald’s ? Allows them to protect their brand name ?Microsoft ? Uses to extend market power 169。2020 Pearson Education, Inc. Chapter 11 88 A Restaurant’s Pricing Problem 169。2020 Pearson Education, Inc. Chapter 11 86 Bundling ?Mixed Bundling in Practice ?Use of market surveys to determine reservation prices ?Design a pricing strategy from the survey results ?Can show graphically using information collected from consumers ?Consumers are separated into four regions ?Can change prices to find max profits 169。2020 Pearson Education, Inc. 84 Mixed Bundling with Zero Marginal Costs A and D purchase individually. B and C purchase bundled. Profits are highest with mixed bundling. r1 20 40 60 80 100 120 10 90 r2 20 40 60 80 100 120 10 90 C A D B 169。2020 Pearson Education, Inc. Chapter 11 82 Mixed Versus Pure Bundling r1 10 20 30 40 50 60 70 80 90 100 r2 10 20 30 40 50 60 70 80 90 100 C2 = MC2 C2 = 30 For each good, marginal production cost exceeds reservation price of one consumer. ?A and D will buy individually ?B and C will buy bundle A B D C C1 = MC1 C1 = 20 With positive marginal costs, mixed bundling may be more profitable than pure bundling. 169。2020 Pearson Education, Inc. Chapter 11 80 Mixed Bundling – Example ?Demands are perfectly negatively correlated but significant marginal costs ?Four customers under three different strategies ?Selling good separately, P1 = $50, P2 = $90 ?Selling goods only as a bundle, PB = $100 ?Mixed bundling: ? Sold individually with P1 = P2 = $ ? Sold as a bundle with PB = $100 169。2020 Pearson Education, Inc. Chapter 11 78 Movie Example r2 r1 Bundling pays due to negative correlation. (Wind) (Gertie) 5,000 14,000 10,000 5,000 10,000 12,000 4,000 3,000 B A 169。2020 Pearson Education, Inc. Chapter 11 76 Reservation Prices r2 r1 P2 P1 If the demands are perfectly positively correlated, the firm will not gain by bundling. It would earn the same profit by selling the goods separately. 169。2020 Pearson Education, Inc. Chapter 11 74 Consumption Decisions When Products are Bundled r2 r1 Consumers buy the bundle when r1 + r2 PB (PB = bundle price). PB = r1 + r2 or r2 = PB r1 Region 1: r PB Region 2: r PB r2 = PB r1 I Consumers buy bundle (r PB) II Consumers do not buy bundle (r PB) 169。2020 Pearson Education, Inc. Chapter 11 72 Reservation Prices r2 r1 $6 $ Consumer A $10 $10 Consumer C $ $ Consumer B For example, Consumer A is willing to pay up to $ for good 1 and up to $6 for good 2. 169。2020 Pearson Education, Inc. Chapter 11 70 Bundling ?If the movies are bundled: ?Theater A will pay $16,000 for both ?Theater B will pay $13,000 for both ?If each were charged the lower of the two prices, total revenue will be $26,000, the same as by selling the films separately 169。2020 Pearson Education, Inc. Chapter 11 68 Relative Valuations ?More profitable to bundle because relative valuation of two films are reversed ?Demands are negatively correlated ?A pays more for Wind ($12,000) than B ($10,000) ?B pays more for Gertie ($4,000) than A ($3,000) 169。2020 Pearson Education, Inc. Chapter 11 66 Bundling ?Renting the movies separately would result in each theater paying the lowest reservation price for each movie: ?Maximum price Wind = $10,000 ?Maximum price Gertie = $3,000 ?Total Revenue = $26,000 Gone with the Wind Getting Gertie’s Garter Theater A $12,000 $3,000 Theater B $10,000 $4,000 169。2020 Pearson Education, Inc. Chapter 11 64 Bundling ?Bundling is packaging two or more products to gain a pricing advantage ?Conditions necessary for bundling ?Heterogeneous customers ?Price discrimination is not possible ?Demands must be negatively correlated 169。2020 Pearson Education, Inc. Chapter 11 62 Cellular Rate Plans 169。2020 Pearson Education, Inc. Chapter 11 61 Cellular Rate Plans ? In most areas in US, consumers can choose cellular providers: Verizon, Cingular, ATamp。2020 Pearson Education, Inc. Chapter 11 59 Polaroid Cameras ?Analytical framework: c a m e r a s p r o d u c in g of c o s tf ilm p r o d u c in g of c o s ts o ld c a m e r a s of n u m b e rs o ld f ilm ofq u a n t it y c a m e r a of p r i c ef ilm of p r i c e ??????????)()()()(2121nCQCnQTPnCQCnTPQ?169。2020 Pearson Education, Inc. Chapter 11 57 Polaroid Cameras ?In 1971, Polaroid introduced the SX70 camera ?Polaroid was able to use twopart tariff for pricing of camera/film ?Allowed them greater profits than would have been possible if camera used ordinary film ?Polaroid had a monopoly on cameras and film 169。2020 Pearson Education, Inc. Chapter 11 55 The TwoPart Tariff ?Rule of Thumb ?Similar demand: Choose P close to MC and high T ?Dissimilar demand: Choose high P and low T ?Ex: Disneyland in California and Disney world in Florida have a strategy of high entry fee and charge nothing for ride 169。2020 Pearson Education, Inc. Chapter 11 53 The TwoPart Tariff with Many Consumers ?To find optimum bination, choose several binations of P and T ?Find bination that maximizes profit ?Firm’s profit is divided into two ponents ?Each is a function of entry fee, T assuming a fixed sal