This paper analyzes how an incumbent's price policy may signal information not only on demand level but also on demand composition. We show that uniform pricing may have advantages over third degree price discrimination when there are informational asymmetries for a monopolist facing threat of entry. A signalling game with two periods and two players is considered.
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Length: 7 pages Date of creation: 1997 Date of revision: Handle: RePEc:fth:inecpu:149
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Find related papers by JEL classification: D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory