Download or read book Intertemporal Price Discrimination with Complementary Products written by Hui Li and published by . This book was released on 2018 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies intertemporal price discrimination (IPD) with complementary products in the context of e-readers and e-books. Using individual-level data (2008-2012), I estimate a dynamic demand model for e-reader adoption and subsequent book quantity, reading format, and retailer choices in several book genres. I use the estimates to simulate a monopolist's optimal dynamic pricing strategies when facing forward-looking consumers. The results illustrate how skimming/penetration pricing incentives for e-readers and harvesting/investing incentives for e-books interact in this novel setting. The optimal joint IPD strategy is skimming for e-readers and investing for e-books. Counterfactual results suggest that combining IPD with complementary product pricing improves firm profitability because it attenuates the limitations of each pricing approach. In a single-product IPD setting, firms' pricing power is limited when consumers anticipate future price changes and delay purchases. Adding complementary products offers firms two pricing instruments; opposite price trajectories provide conflicting incentives for consumers, limiting intertemporal arbitrage. In a static complementary product setting, firms' pricing power is limited when the relative elasticity between the two products is heterogeneous and conflicting among consumers. Adding IPD sorts heterogeneous consumers into different periods and reduces the need to balance across consumer types.
Download or read book Intertemporal Price Discrimination in Storable Goods Markets written by Igal Hendel and published by . This book was released on 2011 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: We study intertemporal price discrimination when consumers can store for future consumption needs. To make the problem tractable we offer a simple model of demand dynamics, which we estimate using market level data. Optimal pricing involves temporary price reductions that enable sellers to discriminate between price sensitive consumers, who anticipate future needs, and less price-sensitive consumers. We empirically quantify the impact of intertemporal price discrimination on profits and welfare. We find that sales: (1) capture 25-30% of the profit gap between non-discriminatory and third degree price discrimination profits, and (2) increase total welfare
Download or read book Intertemporal Price Discrimination with Multiple Products written by Jean-Charles Rochet and published by . This book was released on 2017 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the multiproduct monopoly profit maximisation problem for a seller who can commit to a dynamic pricing strategy. We show that if consumers' valuations are not strongly-ordered then optimality for the seller requires intertemporal price discrimination and it can be implemented by dynamic pricing on the cross-sell to the bundle. If consumers are perfectly negatively correlated, reducing the cross-sell price at a single point in time is optimal. For general valuations we show that if the cross-partial derivative of the profit function is negative then dynamic pricing on the cross-sell is more profitable than fixing prices. So we show that the celebrated Stokey (1979) no-discrimination-across-time result does not extend to multiple good sellers when consumers' valuations are drawn from the tilted uniform, the shifted uniform, the exponential, or the normal distribution. We extend our results to welfare, to complementarities in demand, and to the determination of optimal discount schedules.
Download or read book Intertemporal Price Discrimination in Consumer Packaged Goods written by Ryan Mansley and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Temporary price promotions, or sales, are common in many markets. Using retail scanner data, I find that manufacturers, not retailers, control the timing of sales, while retailers exercise some control over the magnitude of the price decrease. I also find that observed sale policy is more consistent with intertemporal price discrimination than with other explanations. I develop an empirically tractable model that is consistent with these facts and use it to show that sales generally improve consumer surplus and total welfare relative to static pricing. I also find that the effects of market concentration on sales are ambiguous; firms must have some degree of market power for sales to occur, but there are also scenarios when an increase in market power can decrease the occurrence of sales or eliminate them entirely.
Download or read book Intertemporal Price Discrimination with Time Varying Valuations written by Victor F. Araman and published by . This book was released on 2020 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: A firm that sells a non perishable product considers intertemporal price discrimination in the objective of maximizing the long-run average revenue. Each period, a number of interested customers approach the firm and can either purchase on arrival, or remain in the system for a period of time. During this time, each customer's valuation changes following a discrete and homogenous Markov chain. Customers leave the system if they either purchase at some point, or their valuations reach an absorbing state v0. We show that, in this context, cyclic strategies are optimal, or nearly optimal. When the pace of intertemporal pricing is constrained to be comparable to customers patience level, we have a good control on the cycle length and on the structure of the optimizing cyclic policies. We also obtain an algorithm that yields the optimal (or near optimal) cyclic solutions in polynomial time in the number of prices. We cast part of our results in a general framework of optimizing the long-run average revenues for a class of payoffs that we call weakly coupled, in which the revenue per period depends on a finite number of neighboring prices.
Download or read book Dynamic Pricing written by Mark Stenius Roberts and published by . This book was released on 1977 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Micro foundations of Intertemporal Price Discrimination written by Teow Hock Koh and published by . This book was released on 2005 with total page 18 pages. Available in PDF, EPUB and Kindle. Book excerpt: Investigates the optimality of intertemporal price discrimination for a durable-good monopoly in a model where infinitely-lived households face an intertemporal budget constraint and consume both durable goods and non-durable goods.
Download or read book Intertemporal price discrimination and sticky prices written by Louis Phlips and published by . This book was released on 1977 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Intertemporal Price Discrimination and Competition written by Ralph C. Bayer and published by . This book was released on 2006 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this study we investigate the impact of competition on markets for non-durable goods where intertemporal price discrimination is possible. We develop a simple model of different potential scenarios for intertemporal price discrimination and implement it in a laboratory experiment. We compare the outcomes in monopolies and duopolies. Surprisingly, we find that competition does not necessarily prevent intertemporal price discrimination, as our model predicts. However, competition generally reduces sales prices, but by far less than theory predicts. As expected, competition increases efficiency.
Download or read book Intertemporal Price Discrimination written by Peter J. McGoldrick and published by . This book was released on 1997 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Intertemporal Price Discrimination in a Congested Market written by and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Intertemporal Price Quality Discrimination and the Coase Conjecture written by Praveen Kumar and published by . This book was released on 2006 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine time-consistent intertemporal price-quality discrimination by a durable goods monopolist, when there are a continuum of buyer demand-intensities with respect to product quality, and it is profitable for the monopolist to trade with the marginal buyer-type (i.e., the gap case). We show that along every subgame perfect equilibrium path, with probability 1, prices and qualities decline over time, and the market is completely and monotonically depleted according to buyer-type in a finite number of offers. But, unlike the fixed quality literature, the monopolist may randomize over price-quality offers along the equilibrium path. We also show that the Coase conjecture continues to be valid here, but in a form that is significantly different from the usual formulation. In the limit, as the time between offers evaporates, the monopolist makes a continuum of offers and perfectly screens the market. However, he effectively cannot price-discriminate, because the equilibrium profits converge to the complete pooling profits that would be made if the entire market had the marginal buyer-type's valuatio.
Download or read book Intertemporal price discrimination uncertainty and introductory offers written by C. Doyle and published by . This book was released on 1985 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Intertemporal Price Discrimination in Infinite Horizon written by Lionel Wilner and published by . This book was released on 2011 with total page 14 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Intertemporal Price Discrimination Via Reference Price Effects written by Zizhuo Wang and published by . This book was released on 2015 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: We consider the dynamic pricing problem a monopolistic seller faces when customers arrive in heterogeneous time periods and their purchase decisions are affected by reference prices formed from their past purchase experiences. We illustrate that a new form of price discrimination opportunity exists in such situations, where the seller's optimal pricing strategy is a cyclic one, even when the customers are loss-neutral and their demand functions are identical. This result differs from those in prior studies where the optimal price paths are shown to be asymptotically constant when customer arrival times are homogeneous or when there are no reference price effects, thus is unique due to the interaction between the heterogeneous arrivals and the reference price effects. We also provide the length of the cycle when the demand function is linear. In this era where customer information becomes easier accessible, our results suggest the seller consider this new dimension of price discrimination in conjunction with the old ones, in order to take advantage of the full power of customer data.
Download or read book Handbook of the Economics of Marketing written by and published by North Holland. This book was released on 2019-09-15 with total page 632 pages. Available in PDF, EPUB and Kindle. Book excerpt: Handbook of the Economics of Marketing, Volume One: Marketing and Economics mixes empirical work in industrial organization with quantitative marketing tools, presenting tactics that help researchers tackle problems with a balance of intuition and skepticism. It offers critical perspectives on theoretical work within economics, delivering a comprehensive, critical, up-to-date, and accessible review of the field that has always been missing. This literature summary of research at the intersection of economics and marketing is written by, and for, economists, and the book's authors share a belief in analytical and integrated approaches to marketing, emphasizing data-driven, result-oriented, pragmatic strategies. Helps academic and non-academic economists understand recent, rapid changes in the economics of marketing Designed for economists already convinced of the benefits of applying economics tools to marketing Written for those who wish to become quickly acquainted with the integration of marketing and economics
Download or read book Price Discrimination and Intertemporal Self selection written by Mark Bagnoli and published by . This book was released on 1990 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
