Intertemporal Price Discrimination and Sales Strategy under Incomplete Information

Michael Landsberger and Isaac Meilijson

RAND Journal of Economics, 1985, vol. 16, issue 3, 424-430

Abstract: This article examines intertemporal price variations to provide a theoretical explanation for them. When firms have only incomplete information about consumers' reservation prices for the commodity, we contend that some intertemporal price variations can result from attempts by firms to discriminate among consumers. We demonstrate that such price discrimination is the optimal policy for a seller if consumers have a higher time discount rate than producers.

Date: 1985
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