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Responsive Pricing

Author

Listed:
  • Pascal Courty

    (European University Institute)

  • Mario Pagliero

Abstract

We study the eciency property of responsive pricing, a scheme that proposes to increase prices as a function of the level of capacity utilization in environments where traditional allocation schemes (e.g. competitive markets, auctions) cannot be implemented in practice. We show that although responsive pricing implements allocations that are arbitrarily close to full capacity utilization (no wasted capacity and no excess demand), these allocations are not always ecient. We identify conditions under which eciency occurs and discuss implications for the use of responsive pricing

Suggested Citation

  • Pascal Courty & Mario Pagliero, 2006. "Responsive Pricing," 2006 Meeting Papers 315, Society for Economic Dynamics.
    • Handle: RePEc:red:sed006:315
    as

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    Other versions of this item:

    • Pascal Courty & Mario Pagliero, 2008. "Responsive pricing," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 34(2), pages 235-259, February.

    Citations

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    Cited by:

    1. is not listed on IDEAS
    2. Lindsey, Robin, 2009. "Cost recovery from congestion tolls with random capacity and demand," Journal of Urban Economics, Elsevier, vol. 66(1), pages 16-24, July.
    3. Courty, Pascal & Pagliero, Mario, 2010. "Price variation antagonism and firm pricing policies," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 235-249, August.
    4. Pascal Courty & Mario Pagliero, 2011. "Does responsive pricing smooth demand shocks?," Applied Economics, Taylor & Francis Journals, vol. 43(30), pages 4707-4721.
    5. Courty, Pascal & Pagliero, Mario, 2003. "Does Responsive Pricing Increase Efficiency? Evidence from Pricing Experiments in an Internet Café," CEPR Discussion Papers 4149, C.E.P.R. Discussion Papers.
    6. Fabio Musso, 2010. "Innovation in Marketing Channels," Symphonya. Emerging Issues in Management, Niccolò Cusano University, issue 1 Marketi.
    7. Dobromir Stoyanov, 2021. "Marketing of vending channels: a case of French university campuses," Post-Print hal-03812781, HAL.

    More about this item

    Keywords

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    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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