Article1985

Intertemporal Price Discrimination and Sales Strategy under Incomplete Information

97 citations0/0 files storedThe RAND Journal of Economics

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Consumer Market Behavior and Pricing Merger and Competition Analysis Supply Chain and Inventory Management

Abstract

This article examines intertemporal price variations to provide a theoretical explanation for them. When firms have only incomplete information about consumers' reservation prices for the commodity, we contend that some intertemporal price variations can result from attempts by firms to discriminate among consumers. We demonstrate that such price discrimination is the optimal policy for a seller if consumers have a higher time discount rate than producers.

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References

1978Monopoly and product quality 1980A Model of Sales.1984Monopoly with Incomplete Information 1981Rational Expectations and Durable Goods Pricing 1979Intertemporal Price Discrimination 1971A Disneyland Dilemma: Two-Part Tariffs for a Mickey Mouse Monopoly 1984Cyclic Pricing by a Durable Goods Monopolist 1983Selling to risk averse buyers with unobservable tastes

Cited by

2003Wait or buy? The strategic consumer: Pricing and profit implications 2008Durable-Goods Monopoly with Varying Demand 2013Dynamic pricing with strategic customers 2016Two-period pricing and decision strategies in a two-echelon supply chain under price-dependent demand 2016Intertemporal Price Discrimination: Dynamic Arrivals and Changing Values 2020Becoming Strategic: Endogenous Consumer Time Preferences and Multiperiod Pricing 2004A Multichannel Model of Separating Equilibrium in the Face of the Digital Divide

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