Two-part tariffs with partial unbundling

The paper explores second degree price discrimination in a multidimensional\ngood context. There are two types of consumers with demand\ndescribed by a two-dimensional vector, a quantity dimension and a service\nattribute dimension (mode of usage, usage pattern). The adverse selection\nparameter determines the consumers’ willingness to pay for quantity\nincrements with a certain set of attributes. The multi-dimensionality is\nexploited by forcing a restriction on the mode of usage towards consumers\nwith low willingness to pay in order to make it less tempting for high types\nto mimic a low type. We show that the firm introduces distortions in\nthe use of the service against a decrease in the quantity distortions in the low-type’s contract.