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Dynamic Price Discrimination with Customer Recognition by Ching-Jen Sun is a Economics, Econometrics and Finance article available to read on EtoBox.

What is Dynamic Price Discrimination with Customer Recognition about?

Abstract This paper studies a general two-period model of product line pricing with customer recognition. Specifically, we consider a monopolist who can sell vertically differentiated products over two periods to heterogeneous consumers. Each consumer demands one unit of the product in each period. In the second period, the monopolist can condition the price–quality offers on the observed purchasing behavior in the first period. In this setup, the monopolist can price discriminate consumers in two dimensions: by quality as well as by purchase history. We fully characterize the monopolist’s optimal pricing strategy when there are two types of consumers. When the type space is a continuum, we show that there is no fully separating equilibrium, and some properties of the optimal contracts (price–quality pairs) are characterized within the class of partitional perfect Bayesian equilibria.

Who reads Dynamic Price Discrimination with Customer Recognition?

Author

Ching-Jen Sun

Publisher

Walter de Gruyter GmbH

Published

2014

Language

EN

Field

Economics, Econometrics and Finance (Social Sciences)