Intertemporal price discrimination in infinite horizon

Lionel Wilner

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Abstract: We show that intertemporal price discrimination is used in infinite horizon by a credible durable-good monopolist under incomplete information. Consumers and the firm have different values for the trade because of distinct discount factors. We provide an analytical characterization of the optimal price policy with an ordinary differential equation depending on agents' relative patience. The gain from intertemporal price discrimination with respect to uniform pricing increases with the relative patience of the firm. Polar cases of this setting include Stokey (1979) and Landsberger and Meilijson (1985).

Keywords: Intertemporal price discrimination; Durable-good monopolist; Nonlinear pricing; Non-transferability (search for similar items in EconPapers)
Date: 2014
Note: View the original document on HAL open archive server: https://hal.science/hal-04799376v1
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Published in Economics Letters, 2014, 122 (2), pp.358-361. ⟨10.1016/j.econlet.2013.12.036⟩

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Related works:
Journal Article: Intertemporal price discrimination in infinite horizon (2014)
Working Paper: Intertemporal Price Discrimination in Infinite Horizon (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04799376

DOI: 10.1016/j.econlet.2013.12.036

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