Limit Pricing with Incomplete Information: Answers to Frequently Asked Questions
AbstractStrategic pricing is an important and exciting topic in industrial organization and the economics of strategy. A wide range of texts use what has become a standard version of the Milgrom and Roberts (1982a) limit-pricing model to convey the essential ideas of strategic pricing under incomplete information. In addition to providing a formal, but succinct, review of the standard model, the author addresses three questions that commonly arise when the model is presented to students: What happens if there are more than two periods. What if information is still incomplete in the postentry subgame. What if the incumbent does not know the entrant's beliefs. The author shows that, although there are some interesting behavioral implications, none of these extensions significantly changes the conclusions of the basic model.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal The Journal of Economic Education.
Volume (Year): 35 (2004)
Issue (Month): 1 (January)
Contact details of provider:
Web page: http://www.tandfonline.com/VECE20
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.