Social learning and delay in a dynamic model of price competition

• 成果类型: Article
• 署名作者: Aoyagi, Masaki; Bhalla, Manaswini; Gunay, Hikmet
• 署名单位: University of Osaka; Indian Institute of Management (IIM System); Indian Institute of Management Bangalore; University of Manitoba
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2016.05.005
• 发表日期: 2016
• 页码: 565-600
• 关键词: Dynamic pricing; duopoly; product differentiation; Durable good; revenue management; Conspicuous consumption

摘要

This paper studies dynamic price competition between two firms selling differentiated durable goods to two buyers whose valuations of the two goods depend on their own private type as well as that of the other buyer. We derive a key intertemporal property of the equilibrium prices and construct an equilibrium based on this property. We show that social learning reduces the equilibrium prices in the sense that when the buyers are more interdependent and hence have a stronger incentive to wait and see, the firms respond by lowering their period 1 prices. Interestingly, we find that this response by the firms along with the intertemporal property of the equilibrium prices implies that buyers delay their decisions less often when they become more interdependent. (C) 2016 Elsevier Inc. All rights reserved.