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Price dispersion in duopolies with heterogeneous consumers

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  • Sinitsyn, Maxim

Abstract

In this paper, I modify Varian's [Varian, H.R. (1980). A model of sales, American Economic Review, 70(4), 651-659] 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 effect of consumer heterogeneity on firms' optimal pricing strategies.

Suggested Citation

  • Sinitsyn, Maxim, 2009. "Price dispersion in duopolies with heterogeneous consumers," International Journal of Industrial Organization, Elsevier, vol. 27(2), pages 197-205, March.
    • Handle: RePEc:eee:indorg:v:27:y:2009:i:2:p:197-205
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    References listed on IDEAS

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    Cited by:

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    7. Maxim Sinitsyn, 2017. "Pricing with Prescheduled Sales," Marketing Science, INFORMS, vol. 36(6), pages 999-1014, November.
    8. Maxim Sinitsyn, 2012. "Coordination of Price Promotions in Complementary Categories," Management Science, INFORMS, vol. 58(11), pages 2076-2094, November.
    9. Matthias Hunold & Kai Hüschelrath & Ulrich Laitenberger & Johannes Muthers, 2020. "Competition, Collusion, and Spatial Sales Patterns: Theory and Evidence," Journal of Industrial Economics, Wiley Blackwell, vol. 68(4), pages 737-779, December.
    10. Matthias Hunold & Johannes Muthers, 2018. "Spatial Competition with Capacity Constraints and Subcontracting," Economics working papers 2018-13, Department of Economics, Johannes Kepler University Linz, Austria.
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