In this chapter we look at the monopolistic screening model, which is a particular example of the non-linear pricing model. Non-linear tariffs include railroad and electricity schedules and rental rates for durable goods and space. Another application of these models is to devise an optimal compensation scheme for a firm’s manager. The major justification for non-linear pricing is the existence of private information on the side of consumers.
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Basov, S., Bhatti, I. (2016). Monopolistic Screening. In: Islamic Finance in the Light of Modern Economic Theory. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-28662-8_8
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DOI: https://doi.org/10.1057/978-1-137-28662-8_8
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