PRICING DISPERSION IN DUOPOLIES WITH HETEROGENOUS CONSUMERS

Maxim Sinitsyn

Departmental Working Papers from McGill University, Department of Economics

Abstract: In this paper, I modify Varian's (1980) model of sales to allow for heterogeneity in consumer preferences. I show that in mixed strategy equilibria each firm charges a finite number of prices. Using this characterization, I examine the e¤ect of consumer heterogeneity on firms' optimal pricing strategies.

JEL-codes: D43 L13 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2007-06
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Persistent link: https://EconPapers.repec.org/RePEc:mcl:mclwop:2007-07

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