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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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    Citations

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    Cited by:

    1. Schultz, Christian, 2014. "Consumer poaching, brand switching, and price transparency," Economics Letters, Elsevier, vol. 123(3), pages 266-269.
    2. Maxim Sinitsyn, 2012. "Coordination of Price Promotions in Complementary Categories," Management Science, INFORMS, vol. 58(11), pages 2076-2094, November.
    3. Hunold, Matthias & Hüschelrath, Kai & Laitenberger, Ulrich & Muthers, Johannes, 2017. "Competition, collusion and spatial sales patterns: Theory and evidence," ZEW Discussion Papers 17-035, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    4. Hunold, Matthias & Muthers, Johannes, 2017. "Capacity constraints, price discrimination, inefficient competition and subcontracting," DICE Discussion Papers 254, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    5. Mathur, Sameer & Sinitsyn, Maxim, 2013. "Price promotions in emerging markets," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 404-416.

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