Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
Partitioned pricing is a pricing practice that divides the price of a product into a base price and one or more mandatory surcharges. This paper develops a theory of partitioned pricing using a duopoly model where the owner of each firm determines the surcharge, but delegates the setting of the base price to a manager. In equilibrium, both firms choose partitioned pricing over the conventional all-inclusive pricing. Moreover, partitioned pricing leads to higher full prices and larger profits than all-inclusive pricing. Most surprisingly, collusion on surcharges without any coordination on base prices is as profitable as collusion on all-inclusive prices.