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Dynamic Pricing in Bilateral Relationships: Experimental Evidence

Author

Listed:
  • Stefan Buehler

    (HSG - University of St.Gallen)

  • Thomas F Epper

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - ULCO - Université du Littoral Côte d'Opale - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

  • Nicolas Eschenbaum

    (HSG - University of St.Gallen)

  • Roberta Koch

    (HSG - University of St.Gallen)

Abstract

This paper presents experimental evidence on dynamic pricing in a large number of finite-horizon bilateral relationships, building on Hart and Tirole (1988). We examine four distinct treatments that vary the mode of trade and the seller's commitment ability. We find that theory accurately predicts average prices across relationships but falls short of capturing the diversity of individual price trajectories. We also find that commitment has less bite than theory predicts, with sellers leaving significant rents to buyers and frequently committing to changing or oscillating prices. Our analysis suggests that theory explains behavior under renting better than under selling.

Suggested Citation

  • Stefan Buehler & Thomas F Epper & Nicolas Eschenbaum & Roberta Koch, 2026. "Dynamic Pricing in Bilateral Relationships: Experimental Evidence," Working Papers hal-05509337, HAL.
    • Handle: RePEc:hal:wpaper:hal-05509337
    Note: View the original document on HAL open archive server: https://hal.science/hal-05509337v1
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