Please use this identifier to cite or link to this item: https://repository.iimb.ac.in/handle/2074/15547
Title: Dynamic pricing under social learning
Authors: Bhalla, Manaswini 
Keywords: Strategic consumer;Social learning;Pricing durable goods
Issue Date: 2011
Conference: International Conference of Industrial Organization, 16-18 March, 2011, Boston 
Abstract: A monopolist uses prices as an instrument to influence consumers' belief about the unknown quality of its product. Consumers observe prices and sales in earlier periods to learn about the product. Every period they decide whether to consume the product or to wait for a lower price in future. We solve for the optimal price strategy of a monopolist. We show that for certain range of beliefs prices increase over the period of time. Per period profits increase over the period of time. We find that the firm encourages social learning for a greater range of beliefs and has greater expected revenue when it faces consumers that can delay their purchase decision versus when they can’t.
URI: https://repository.iimb.ac.in/handle/2074/15547
Appears in Collections:2010-2019 P

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