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Intertemporal price discrimination with two products
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Rochet, Jean-Charles and Thanassoulis, John (2019) Intertemporal price discrimination with two products. RAND Journal of Economics , 50 (4). pp. 951-973. doi:10.1111/1756-2171.12301 ISSN 0741-6261.
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Official URL: https://doi.org/10.1111/1756-2171.12301
Abstract
We study the two‐product monopoly profit maximization problem for a seller who can commit to a dynamic pricing strategy. We show that if consumers' valuations are not strongly ordered, then optimality for the seller can require intertemporal price discrimination: the seller offers a choice between supplying a complete bundle now, or delaying the supply of a component of that bundle until a later date. For general valuations, we establish a sufficient condition for such dynamic pricing to be more profitable than mixed bundling. So we show that the established no‐discrimination‐across‐time result does not extend to two‐product sellers under standard taste distributions.
Item Type: | Journal Article | ||||||||
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Divisions: | Faculty of Social Sciences > Warwick Business School | ||||||||
Journal or Publication Title: | RAND Journal of Economics | ||||||||
Publisher: | Wiley-Blackwell Publishing, Inc. | ||||||||
ISSN: | 0741-6261 | ||||||||
Official Date: | December 2019 | ||||||||
Dates: |
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Volume: | 50 | ||||||||
Number: | 4 | ||||||||
Page Range: | pp. 951-973 | ||||||||
DOI: | 10.1111/1756-2171.12301 | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Reuse Statement (publisher, data, author rights): | "This is the peer reviewed version of the following article: Rochet, J. and Thanassoulis, J. (2019), Intertemporal price discrimination with two products. The RAND Journal of Economics which has been published in final form at https://doi.org/10.1111/1756-2171.12301. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions." | ||||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||||
Date of first compliant deposit: | 7 May 2019 | ||||||||
Date of first compliant Open Access: | 9 October 2021 | ||||||||
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