Intertemporal Price Discrimination and Sales Strategy under Incomplete Information

Landsberger, Michael; Meilijson, Isaac

doi:10.2307/2555568

Cited by 88 publications

(58 citation statements)

References 10 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…For early work focusing on the implications of each of the two classes of policies, the reader is referred to Stokey (1979) and Landsberger and Meilijson (1985) for pre-announced pricing, and to Besanko and Winston (1990) for responsive pricing. Since then, both classes of policies have been used extensively to study various operational decisions; recent examples include Yin et al (2009), who assume a pre-announced price plan to study the effects of alternative inventory display formats on firm profit, and Cachon and Swinney (2009), who assume a responsive price plan to study the firm's quantity and salvage-pricing decisions.…”

Section: Literature Reviewmentioning

confidence: 99%

“…This paper is a first attempt towards understanding the relative effectiveness of pre-announced and responsive pricing when the firm and consumers face quality uncertainty and operate in the presence of SL. As such, our model and analysis are much in the spirit of Landsberger and Meilijson (1985) and Besanko and Winston (1990), in that our focus is on highlighting the effects of SL within a simple model of the interactions between the firm and the consumer population. For each class of policies, we find that the implications of SL are non-obvious, in terms of both consumer behavior as well as firm pricing decisions.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The firm's optimal pricing policy, which (along with the consumers' adoption policy, as described above) specifies the unique equilibrium of the pricing-adoption game, is described in Proposition 1 (see also Landsberger and Meilijson (1985)). Proposition 1.…”

Section: Benchmark: Pre-announced Pricingmentioning

confidence: 99%

See 2 more Smart Citations

Dynamic Pricing in the Presence of Social Learning and Strategic Consumers

2017

View full text Add to dashboard Cite

When a product of uncertain quality is first introduced, consumers may be enticed to strategically delay their purchasing decisions in anticipation of the product reviews of their peers. This paper investigates how the presence of social learning interacts with the adoption decisions of strategic consumers and the dynamicpricing decisions of a monopolist firm, within a simple two-period model. When the firm commits to a price path ex ante (pre-announced pricing), we show that the presence of social learning increases the firm's ex ante expected profit, despite the fact that it exacerbates consumers' tendency to strategically delay their purchase. As opposed to following a price-skimming policy which is always optimal in the absence of social learning, we find that, for most model parameters, the firm will announce an increasing price plan. When the firm does not commit to a price path ex ante (responsive pricing), interestingly, the presence of social learning has no effect on strategic purchasing delays. Under this pricing regime, social learning remains beneficial for the firm and prices may either rise or decline over time, with the latter being ex ante more likely.Furthermore, we illustrate that contrary to results reported in existing literature, in settings characterized by social learning, price-commitment is generally not beneficial for a firm facing strategic consumers.

show abstract

Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

See 1 more Smart Citation

Dynamic Pricing in the Presence of Social Learning and Strategic Consumers

2017

View full text Add to dashboard Cite

show abstract

“…Prior analytical modeling has examined the classic cannibalization problem that can exist when high and low type consumers exist in the same shopping channel (Stokey 1979;Landsberger and Meilijson 1985;Moorthy and Png 1992). In the present analysis, we show how the digital divide artificially segments the marketplace allowing the seller to more efficiently market its goods to each consumer segment, thereby mitigating the cannibalization problem.…”

Section: Introductionmentioning

confidence: 85%

“…Stokey (1979) showed how a monopolist could use delay as a way of selling to multiple consumers who have differing reservation prices. Landsberger and Meilijson (1985) built on that idea to show that intertemporal price discrimination works when the seller and buyers have different discount rates. Conner (1988) illustrates how a firm may spend aggressively on research and development to create a new version of an old product, and then delay introduction of the new product until the old one is challenged by a competitor.…”

Section: Previous Modelingmentioning

confidence: 99%

A multi-channel model of separating equilibrium in the face of the digital divide

Riggins¹

2004

37th Annual Hawaii International Conference on System Sciences, 2004. Proceedings of The

View full text Add to dashboard Cite

We develop a multi-channel model of separating equilibrium where a monopolist markets a durable good to high and low type consumers in two different channels -an online Internet storefront and an offline brick-and-mortar store. We show how the digital divide, where high type consumers dominate the online channel and low type consumers dominate the offline channel, artificially segments the marketplace thereby mitigating the classic cannibalization problem. This allows the seller to more efficiently market its goods to each consumer segment. We show conditions under which low type consumers are initially served in the offline channel, but subsequently bridging the divide results in low type consumers not being served in either channel. We also examine the implications of bridging the digital divide when the seller employs personalization technology in the online channel and uses delay by engaging in intertemporal price discrimination.3

show abstract

Durable Goods Monopoly with Limited Choice of Commitment Strategy: When Should the Monopolist Precommit?*

Calem

1997

Southern Economic Journal

View full text Add to dashboard Cite

Intertemporal Price Discrimination and Sales Strategy under Incomplete Information

Cited by 88 publications

References 10 publications

Dynamic Pricing in the Presence of Social Learning and Strategic Consumers

Dynamic Pricing in the Presence of Social Learning and Strategic Consumers

A multi-channel model of separating equilibrium in the face of the digital divide

Durable Goods Monopoly with Limited Choice of Commitment Strategy: When Should the Monopolist Precommit?*

Contact Info

Product

Resources

About