HIRING AND LEASING WITH NONLINEAR PRICES

This paper examines the problem of a monopolist setting an optimal non linear pricing schedule in the face of consumers of unknown type who a rrive randomly over time and self-select a choice of hire period. The major determinant of pricing policy is the customer arrival distributi on, with the overall level of price higher than in the atemporal yield management/nonuniform pricing solution by a margin which increases wi th the average frequency with which potential customers arrive. By con trast, the solution is generally fairly insensitive to variations in t he time rate of discount, although there is a tendency for the rate of price discount to increase with increases in the time discount rate.