Intertemporal price discrimination: dynamic arrivals and changing values

Garrett, Daniel F. (2016) Intertemporal price discrimination: dynamic arrivals and changing values. American Economic Review (AER), 106 (11). pp. 3275-3299.

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Official URL: http://tse-fr.eu/pub/30569

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: Article
Language: English
Date: November 2016
Refereed: Yes
JEL codes: D82 - Asymmetric and Private Information
L12 - Monopoly; Monopolization Strategies
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 21 Jul 2016 11:53
Last Modified: 24 Jan 2019 00:13
OAI ID: oai:tse-fr.eu:30569
URI: http://publications.ut-capitole.fr/id/eprint/22243

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