Intertemporal Pricing with Unobserved Consumer Arrival Times
AbstractWe examine optimal selling mechanisms with ex-ante commitment for a nondurable good when the seller does not observe the times at which strategic consumers arrive on the market and how much they are willing to pay for the good. Assuming consumer risk neutrality, we demonstrate in this two-dimensional screening problem that stochastic mechanisms are suboptimal. In practice, this means that quantity rationing and behavior-based price discrimination do not improve the profit compared to a simple time-dependent price schedule. We explain how the optimal profit may be achieved with a first-come first-served policy
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 InfoPaper provided by Centre de Recherche en Economie et Statistique in its series Working Papers with number 2012-23.
Date of creation: Oct 2012
Date of revision:
Intertemporal pricing; Strategic consumers; Arrival dates; Heterogeneous cohorts; two-dimensional screening;
Find related papers by JEL classification:
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-02-08 (All new papers)
- NEP-COM-2013-02-08 (Industrial Competition)
- NEP-IND-2013-02-08 (Industrial Organization)
- NEP-MIC-2013-02-08 (Microeconomics)
- NEP-MKT-2013-02-08 (Marketing)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mark Armstrong & Jidong Zhou, 2011.
"Exploding Offers and Buy-Now Discounts,"
Economics Series Working Papers
575, University of Oxford, Department of Economics.
- Mark Armstrong & Jidong Zhou, 2011. "Exploding Offers and Buy-Now Discounts," Working Papers 11-18, New York University, Leonard N. Stern School of Business, Department of Economics.
- Armstrong, Mark & Zhou, Jidong, 2010. "Exploding offers and buy-now discounts," MPRA Paper 24849, University Library of Munich, Germany.
- Mark Armstrong & Jidong Zhou, 2010. "Exploding Offers and Buy-Now Discounts," EERI Research Paper Series EERI_RP_2010_44, Economics and Econometrics Research Institute (EERI), Brussels.
- Armstrong, Mark & Zhou, Jidong, 2010. "Exploding offers and buy-now discounts," MPRA Paper 22531, University Library of Munich, Germany.
- Wilson, Charles A, 1988. "On the Optimal Pricing Policy of a Monopolist," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 164-76, February.
- Marc Möller & Makoto Watanabe, 2010. "Advance Purchase Discounts Versus Clearance Sales," Economic Journal, Royal Economic Society, vol. 120(547), pages 1125-1148, 09.
- Dana, James D, Jr, 2001. "Monopoly Price Dispersion under Demand Uncertainty," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(3), pages 649-70, August.
- Volker Nocke & Martin Peitz, 2007. "A Theory of Clearance Sales," Economic Journal, Royal Economic Society, vol. 117(522), pages 964-990, 07.
- Simon Board, 2008. "Durable-Goods Monopoly with Varying Demand," Review of Economic Studies, Oxford University Press, vol. 75(2), pages 391-413.
- Stokey, Nancy L, 1979. "Intertemporal Price Discrimination," The Quarterly Journal of Economics, MIT Press, vol. 93(3), pages 355-71, August.
- Courty, Pascal & Li, Hao, 2000.
Review of Economic Studies,
Wiley Blackwell, vol. 67(4), pages 697-717, October.
- Gale, Ian L & Holmes, Thomas J, 1993.
"Advance-Purchase Discounts and Monopoly Allocation of Capacity,"
American Economic Review,
American Economic Association, vol. 83(1), pages 135-46, March.
- Andrzej Skrzypacz & Simon Board, 2011. "Revenue Management with Forward-Looking Buyers," 2011 Meeting Papers 87, Society for Economic Dynamics.
- Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
- Gershkov, Alex & Moldovanu, Benny, 2012. "Dynamic allocation and pricing: A mechanism design approach," International Journal of Industrial Organization, Elsevier, vol. 30(3), pages 283-286.
- Stéphane Gauthier & Guy Laroque, 2011. "On the value of randomization," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00639834, HAL.
- Kalyan Talluri & Garrett van Ryzin, 2004. "Revenue Management Under a General Discrete Choice Model of Consumer Behavior," Management Science, INFORMS, vol. 50(1), pages 15-33, January.
- Michael Landsberger & Isaac Meilijson, 1985. "Intertemporal Price Discrimination and Sales Strategy under Incomplete Information," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 424-430, Autumn.
- Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Florian Sallaberry).
If references are entirely missing, you can add them using this form.