The Difference in the Performance among Non-linear Pricing Schedules in Medical Examination

Nonlinear pricing abounds in practice because it is a potentially powerful pricing method to explore consumer surplus. The various forms of nonlinear pricing are feasible within a given industry. In this context, it is important for manufacturers and retailers to understand which nonlinear pricing scheme is appropriate to apply in their specific situation and which nonlinear pricing schedule is the most profitable in their market situation. Although the merits of nonlinear pricing are well documented, the attempt to apply nonlinear pricing in medical service has been relatively rare. The researcher aims to try to full this gap by applying a practice-oriented simulation model to health examination data. We compare the sales volumes among nonlinear pricing scheme such as n-block tariff, two-part tariff, and uniform pricing. We found that n-block tariff outperforms two-part tariff and uniform pricing.