Market Structure and Advance Selling

Marc Möller () and Makoto Watanabe

No 16-020/VII, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: When products are sold in advance, i.e. prior to consumption, consumers trade off an early, uninformed purchase at a low price against a late, informed purchase at a high price. This paper considers the effect of market structure on the prevalence of advance selling. We show that in an oligopolistic market with multi-product firms, advance selling (with its associated allocative inefficiency) is decreasing in market concentration when the consumers’ preference uncertainty is high but can be increasing when uncertainty is low.

Keywords: Competition; Price Discrimination; Individual Demand Uncertainty; Advance Purchase Discounts (search for similar items in EconPapers)
JEL-codes: D43 D80 L13 (search for similar items in EconPapers)
Date: 2016-03-31
New Economics Papers: this item is included in nep-com, nep-ind and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20160020

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