Information Aggregation Under Strategic Delay
AbstractIn this paper, we show that consumers delay their buying to learn the unknown quality of a product. Agents receive imperfect but informative signals about the unknown quality. Then, each one simultaneously decides whether or not to buy the product in one of the two periods. Consumers with moderate tastes will strategically delay their buying to the second period even though they receive a good signal. They deduce the true quality by observing the mass of first period buyers. We avoid equilibrium non-existence problem by using agents with different private values.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 12 (2008)
Issue (Month): 23 ()
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Intertemporal price discrimination;
Find related papers by JEL classification:
- L0 - Industrial Organization - - General
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- Caplin, Andrew & Leahy, John, 1994.
"Business as Usual, Market Crashes, and Wisdom after the Fact,"
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- Caplin, A. & Leahy, J., 1992. "Business as Usual, Market Crashes and Wisdom After the Fact," Discussion Papers 1992_18, Columbia University, Department of Economics.
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