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Pricing Dispersion In Duopolies With Heterogenous Consumers

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Author Info
Maxim Sinitsyn ()

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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.

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Publisher Info
Paper provided by McGill University, Department of Economics in its series Departmental Working Papers with number 2007-07.

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Length: 30 pages
Date of creation: Jun 2007
Date of revision:
Handle: RePEc:mcl:mclwop:2007-07

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Find related papers by JEL classification:
D43 - Microeconomics - - Market Structure and Pricing - - - 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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