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Pricing Dispersion In Duopolies With Heterogenous Consumers

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  • Maxim Sinitsyn

Abstract

In this paper, I modify Varian's (1980) model of sales to allow for heterogeneity in consumer preferences. I show that in mixed strategy equilibria each firm charges a finite number of prices. Using this characterization, I examine the e¤ect of consumer heterogeneity on firms' optimal pricing strategies.

Suggested Citation

  • Maxim Sinitsyn, 2007. "Pricing Dispersion In Duopolies With Heterogenous Consumers," Departmental Working Papers 2007-07, McGill University, Department of Economics.
    • Handle: RePEc:mcl:mclwop:2007-07
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    File URL: https://home.mcgill.ca/files/economics/Pricingdispersionin.pdf
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    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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