Monopoly Pricing in the Presence of Social Learning

• 成果类型: Article
• 署名作者: Crapis, Davide; Ifrach, Bar; Maglaras, Costis; Scarsini, Marco
• 署名单位: Airbnb; Columbia University; Luiss Guido Carli University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2016.2526
• 发表日期: 2017
• 页码: 3586-3608
• 关键词: Social learning; information aggregation; bounded rationality; optimal pricing

摘要

Amonopolist offers a product to a market of consumers with heterogeneous quality preferences. Although initially uninformed about the product quality, they learn by observing past purchase decisions and reviews of other consumers. Our goal is to analyze the social learning mechanism and its effect on the seller's pricing decision. Consumers follow an intuitive, non-Bayesian decision rule. Under conditions that we identify, we show that consumers eventually learn the product's quality. We show how the learning trajectory can be approximated in settings with high demand intensity via a mean-field approximation that highlights the dynamics of this learning process, its dependence on the price, and the market heterogeneity with respect to quality preferences. Two pricing policies are studied: a static price and one with a single price change. Finally, numerical experiments suggest that pricing policies that account for social learning may increase revenues considerably relative to policies that do not.