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Durable-Goods Monopoly with Privately Known Impatience: A Theoretical and Experimental Study

Author

Listed:
  • Werner Güth
  • Sabine Kröger
  • Hans-Theo Normann

Abstract

We analyze a durable-goods monopoly selling a single unit of a good to a buyer whose value of the good is private information. The discount factors of the buyer and the seller may differ and are also privately known. We derive the closed-form solution of a two-period game and compare it to the behavior observed in experiments. The data are to a large extent consistent with the predictions. (JEL C90, L12, C73) Copyright 2004, Oxford University Press.

Suggested Citation

  • Werner Güth & Sabine Kröger & Hans-Theo Normann, 2004. "Durable-Goods Monopoly with Privately Known Impatience: A Theoretical and Experimental Study," Economic Inquiry, Western Economic Association International, vol. 42(3), pages 413-424, July.
    • Handle: RePEc:oup:ecinqu:v:42:y:2004:i:3:p:413-424
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    File URL: http://hdl.handle.net/10.1093/ei/cbh070
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    Citations

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    Cited by:

    1. van Damme, E.E.C. & Larouche, P. & Müller, W., 2006. "Abuse of a Dominant Position : Cases and Experiments," Discussion Paper 2006-020, Tilburg University, Tilburg Law and Economic Center.
    2. Bayer, Ralph-C., 2010. "Intertemporal price discrimination and competition," Journal of Economic Behavior & Organization, Elsevier, vol. 73(2), pages 273-293, February.
    3. repec:gam:jeners:v:11:y:2018:i:2:p:458-:d:132747 is not listed on IDEAS
    4. repec:gam:jgames:v:9:y:2018:i:1:p:10-:d:132752 is not listed on IDEAS
    5. Song, Yanan & Zhao, Xiaobo, 2016. "Strategic customer behavior facing possible stockout: An experimental study," International Journal of Production Economics, Elsevier, vol. 180(C), pages 57-67.

    More about this item

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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