Optimal Monopolist Export Pricing with Dynamic Demand and Learning Curve Effects

Matthias Göcke () and Svetlana Fedoseeva

Open Economies Review, 2016, vol. 27, issue 3, No 2, 447-469

Abstract: Abstract This paper addresses incomplete exchange rate pass-through (ERPT) and pricing-to-market (PTM) by proposing an optimal control model of dynamic monopolistic pricing on a foreign market, which accounts for dynamic demand effects (such as diffusion or saturation) and learning curve effects. It is shown how the optimal dynamic export pricing results in partial or full ERPT in the long-term equilibrium. Moreover, transitional price dynamics are illustrated, which may explain dumping, i.e., temporary prices below unit costs, and (asymmetric) short-run overshooting dynamics of the optimal export price level as a reaction to exchange rate changes.

Keywords: Dynamic pricing; Demand diffusion; Exchange rate pass-through; Learning-by-doing; Pricing-to-market; Dumping; Overshooting (search for similar items in EconPapers)
JEL-codes: C61 F12 L11 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s11079-015-9380-x Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:openec:v:27:y:2016:i:3:d:10.1007_s11079-015-9380-x

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11079/PS2

DOI: 10.1007/s11079-015-9380-x

Access Statistics for this article

Open Economies Review is currently edited by G.S. Tavlas

More articles in Open Economies Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().