Intertemporal price discrimination: dynamic arrivals and changing values

Garrett, Daniel F. (2016) Intertemporal price discrimination: dynamic arrivals and changing values. TSE Working Paper, n. 16-679, Toulouse

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Official URL: http://tse-fr.eu/pub/30568

Abstract

We study the profit-maximizing price path of a monopolist selling a durable good to buyers who arrive over time and whose values for the good evolve stochastically. The setting is completely stationary with an infinite horizon. Contrary to the case with constant values, optimal prices fluctuate with time. We argue that consumers'randomly changing values offer an explanation for temporary price reductions that are often observed in practice.

Item Type: Monograph (Working Paper)
Language: English
Date: July 2016
Place of Publication: Toulouse
JEL codes: D82 - Asymmetric and Private Information
L12 - Monopoly; Monopolization Strategies
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 21 Jul 2016 11:55
Last Modified: 21 Mar 2018 14:03
OAI ID: oai:tse-fr.eu:30568
URI: http://publications.ut-capitole.fr/id/eprint/22242

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