Management and Organizational Studies 2275A/B Lecture 2: 2. - Menu Pricing.docx

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2275A/B
• Professor: Philip King

Document Summary

2:32 pm: letting self-selection do the discriminating, refers to giving all potential buyers a menu of possible price/product combinations, and letting each choose the combination it wants, letting buyers choose from the menu implies self-selection. This, in turn, implies that consumers reveal (to the seller) something o about their demand for the seller"s products o. If all buyers make the same choice then no menu pricing happens. Buy membership: fixed fee up front, lower price later. Don"t buy membership: no upfront fee, lower price later. Will not take membership fee if it is there. Will take membership fee if it"s the only option. Will take no membership fee if it"s not an option o o o o o o o o. Anytime a seller offers more than one "version" of a product at different. This is not menu pricing if the price differences between versions: other examples of menu pricing: o prices mirror their cost differences.