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Intertemporal price discrimination and competition

  • Bayer, Ralph-C.

In this study we investigate the impact of competition on markets for non-durable goods where intertemporal price discrimination is possible. We develop a simple model of different potential scenarios for intertemporal price discrimination and implement it in a laboratory experiment. We compare the outcomes in monopolies and duopolies. Surprisingly, we find that competition does not necessarily prevent intertemporal price discrimination, as our model predicts. However, competition generally reduces sales prices, but by far less than theory predicts. As expected - but not predicted by our simple model - competition increases efficiency.

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File URL: http://www.sciencedirect.com/science/article/pii/S0167-2681(09)00212-1
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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 73 (2010)
Issue (Month): 2 (February)
Pages: 273-293

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Handle: RePEc:eee:jeborg:v:73:y:2010:i:2:p:273-293
Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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