Analyzing the nonlinear pricing strategy of Cibo using an adverse selection game theory model

College

Ramon V. Del Rosario College of Business

Department/Unit

Economics

Document Type

Article

Source Title

DLSU Business and Economics Review

Volume

21

Issue

2

First Page

109

Last Page

112

Publication Date

12-1-2012

Abstract

With the inability of Cibo to correctly identify their patrons of which segment or type they are, a nonlinear pricing scheme was developed by the restaurant in the form the La Familia option. The La Familia option is a price discrimination strategy that attempts to extract surplus from either segment or type; but due to adverse selection, the product offering exhibits distortion to one of the segment or type. © 2012 De La Salle University, Philippines.

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Disciplines

Economics

Keywords

Nonlinear pricing; Restaurant management; Adverse selection (Insurance); Game theory

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