easyjet Pricing Strategy: Should Low-Fare Airlines Offer Last-Minute Deals?

Size: px
Start display at page:

Download "easyjet Pricing Strategy: Should Low-Fare Airlines Offer Last-Minute Deals?"

Transcription

1 easyjet Pricing trategy: hould ow-fare Airlines Offer ast-inute Deals? Aendi Proosition : he general otimization roblem is reresented by: Period : a ubject to 0 Period : a ubject to 0 and - > 0 hus, we can define agrangian in eriod with coefficient λ and in eriod with coefficients and μ o find the subgame erfect equilibrium, we solve the game backwards arge aacity: / / When caacity is large enough, the constraints in both eriods do not bind and thus their coefficients are equal to zero Otimal rices are given by h and h Intermediate aacity: < <, where is given above and is comuted in the last case We first derive the first-order condition of the second-eriod agrangian with resect to, which yields 0 ince in this intermediate case the constraint is binding, 0 and thus 0 herefore, the rice is reresented by ubstituting this rice into the agrangian of eriod yields the following: Differentiating with resect to and equating to zero yields the otimal solution for It is straightforward to check that if, then - > 0, thus = 0, and the otimal rice in eriod is reresented by

2 where is the caacity shortage; in other words, / / ubstituting this eression into the equation for yields Very ow aacity: /, > 0, and the constraint is binding; ie, - = 0 It follows that and thus the airline does not sell to the tourist segment ubstituting this equation into the eression for yields the following otimal second-rice-eriod for the lowcaacity case: ince the airline sells only to the business segment, it follows that ow aacity: < < where is given above We net derive the eression for ote that, when /, the airline sells only to business consumers at rice / his generates otimal unconstrained rofits from the business segment However, when the caacity eceeds that threshold, the airline continues to charge the monooly business rice / until caacity is large enough that the benefit revenue from the additional tourist travelers eceeds the losses from deviating from the otimal rice for the business traveler segment he loss in selling to business travelers is given by l m m m m m he revenue from selling to the tourist segment is given by Equating these two equations yields the threshold caacity level : hus for any, the airline charges, and for any, the airline charges and ote that / / for and that when 0 If this condition is not satisfied, then the airline moves directly from a olicy of low caacity to a olicy of intermediary caacity

3 Proosition : arge aacity: > = et be the tourist with the highest utility that will urchase the ticket in eriod at rice What we do net is find the values of,,, and that will constitute an equilibrium to the new game We begin at eriod, where rofits are reresented by / aimization with resect to the rice yields = / and / In eriod, the eected rofits deend on the business segment that did not urchase tickets in eriod, and the eected third-eriod rofits hus, second-eriod rofits can be reresented as First-order conditions imly that the rice in eriod is reresented by = _ / and rofits are reresented by In eriod, rofits are reresented by We now use the fact that is the marginal consumer for whom the utility from urchasing the ticket in eriod is eactly equal to the utility from waiting and buying the ticket in eriod his yields the following equation for : = β ubstituting = / and solving for yield: / ubstituting this eression for in the rofit function yields he first-order condition for otimality yields the following solution for rices: b and / b b ote that, since it follows that b b and, since, h b where the latter is the unconstrained rice of the two-eriod game ubstituting into the objective function yields Also, it is easy to see that the derivative of the rofits with resect to β yields 0 Demand of the unconstrained case: D D

4 D i i i D hus, for any caacity above this demand < the firm is unconstrained and follows the receding olicy Define ' =a{, } When ' < <, we have to solve the following roblem Intermediate aacity: ' < < et be the tourist with the highest utility that will urchase a ticket in eriod at rice We begin at eriod, where rofits are reresented by /, st 0 /, where is the caacity at the beginning of eriod When the constraint is binding, the rice is given by and the rofits by In eriod, the eected rofits deend on the business segment that did not urchase tickets in eriod, and the eected third-eriod rofits hus, second-eriod rofits can be reresented as First-order conditions imly that the rice in eriod is reresented by = _ / and rofits are reresented by ote that the remaining caacity at the end of the third eriod is In eriod, rofits are reresented by We now use the fact that is the marginal consumer for whom the utility from urchasing the ticket in eriod is eactly equal to the utility from waiting and buying the ticket in eriod his yields that: = β ubstituting and solving for yields note that this analysis is true when < α, which corresonds to ubstituting these eressions for and into the rofit function yields

5 5 First-order conditions yield the following solution for rices: c and c he rofits of the constrained case < < are given by where et, we comared these rofits to the rofits from the two-eriod game where the firm does not offer a last-minute deal and caacity is large < : his term is ositive if < < where, Define i i i={, } It is clear that, if we show that, then for the relevant range of caacity the rofit for the last-minute-deal is larger than that of the two-eriod game without a last-minute deal : It is straightforward to show that this eression is ositive since 0 is ositive for 0 < β < : It is straightforward to show that this eression is ositive since is ositive for 0 < β < Also, it is easy to see that the derivative of the rofits with resect to β yields

6 0 First eriod rice can be greater or less than the rice of the unconstrained two-eriod game: c c h Define i as rices of eriod i in the game we solved in roosition and as rices in eriod i of the two-eriod unconstrained game roosition, large caacity c h It is straightforward to show that if > c h We still must show that if ote that c h, which is ositive if c h ote that, when then it is always true that However, if, there then eists a range of caacity such c h that It is easy to show that 0, which is ositive for 0 < = / and negative for 6 0 < he solution for the game where the firm chooses the otimal β in the first stage: In this section, we solve the game where the airline decides the frequency of the last-minute deal ie, the robability that it introduces the third-eriod β We start the analysis with the case of large caacity and continue with the case of smaller caacity arge aacity: > = et be the tourist with the highest utility that will urchase the ticket in eriod at rice What we do net is find the values of,,,, and β that will constitute an equilibrium to the new game We begin at eriod where rofits are reresented by / aimization with resect to the rice yields = / and / In eriod, eected rofits deend on the business segment that did not urchase tickets in eriod, and eected third-eriod rofits hus, second-eriod rofits can be reresented as First-order conditions imly that the rice in eriod is reresented by = _ / and rofits by In eriod, rofits are reresented by 6

7 We now use the fact that is the marginal consumer for whom the utility from urchasing the ticket in eriod is eactly equal to the utility from waiting and buying the ticket in eriod his fact yields the following equation for : = β ubstituting = / and solving for yields / ubstituting this eression for in the rofit function yields he first-order conditions with resect to and β yield the following solution for rices: b and β = / b ubstituting β into the terms of the ricing terms yields and b b b It is obvious to see that 9 Demand of the unconstrained case: D D D Di i i hus, for any caacity above the demand <, the firm is unconstrained and follows the ' ' receding olicy Define =a{, } When < <, we have to solve the following roblem ' Intermediate aacity: < < et be the tourist with the highest utility that will urchase a ticket in eriod at rice What we do net is find the values of,,, and that will constitute an equilibrium to the new game We begin at eriod, where rofits are reresented by /, st / 0, where is the caacity at the beginning of eriod When the constraint is binding, rice is given by and rofits by In eriod, eected rofits deend on the business segment that did not urchase tickets in eriod, and rofits eected in eriod hus, second-eriod rofits can be reresented as 7

8 8 First-order conditions imly that the rice in eriod is reresented by = _ / and rofits are reresented by ote that the remaining caacity at the end of eriod is In eriod, rofits are reresented by We now use the fact that is the marginal consumer for whom the utility from urchasing the ticket in eriod is eactly equal to the utility from waiting and buying the ticket in eriod his fact yields the following equation for : = β ubstituting and solving for yields ubstituting these eressions for and into the rofit function and deriving with resect to yields c ubstituting this eression into the rofits function and deriving it with resect to β yields 0 c c As the rofit decreases with β, the firm chooses β = 0 Proosition : Define the caacity at the beginning of the i th eriod as i Recall that, due to uncertainty about business consumers arrival, the initial caacity at the beginning of the third eriod can be = if business consumers do not arrive or = if business consumers do arrive We also define to be the tourist with the highest utility that will urchase a ticket in eriod at rice Recall that this consumer is indifferent between urchasing a ticket in eriod at rice and urchasing a ticket during eriod at rice We net solve the game starting with the highest caacity case

9 arge aacity: > = o find the subgame erfect equilibrium, we solve the game backward starting at eriod, where rofits are reresented by / aimization with resect to rice yields = / and / In eriod, the eected rofits are given by aimization with resect to rice yields = / and We now use the fact that is the marginal consumer for whom the utility from urchasing the ticket in eriod is eactly equal to the utility from waiting and buying the ticket in eriod his fact yields the following equation for : = θ + θ ubstituting = / and solving for yields = In eriod, the eected rofits are given by aimization with resect to rice yields = α/ and = α his indicates that tourist consumers do not urchase during the first eriod and thus the firm sells to business consumers during eriod at rice = / and to tourist consumers in eriod at rice = α / his in this case there is no rice discrimination within the tourist segment High-Intermediate aacity: = < < his is the case at which the firm is unconstrained in eriod, and if the business consumers do arrive, the firm will be constrained in eriod We can consider two cases in eriod : If business consumers do not arrive during the second eriod, the initial caacity is given by = In this case, the firm is unconstrained during the third eriod and rofits are reresented by / aimization with resect to rice yields = / and / If business consumers arrive during the second eriod, the initial caacity is given by = In this case, the firm is constrained during the third eriod and has to adjust the third-eriod rice accordingly hus, demand at rice is = olving this equality, we determine that the third-eriod rice is and 9

10 In eriod, the eected rofits are given by aimization with resect to rice yields = / and We now use the fact that is the marginal consumer for whom the utility from urchasing the ticket in eriod is eactly equal to the utility from waiting and buying the ticket in eriod his fact yields the following equation for : = θ + - θ ubstituting and for and solving for yield: In eriod, the eected rofits are given by aimization with resect to rice yields and = α his indicates that tourist consumers do not urchase during the first eriod and thus the firm sells to business consumers during eriod at rice = / and to tourist consumers in eriod at rice = α / Just as in the revious case, there is no rice discrimination within the tourist segment in this case as well ow-intermediate aacity: = < < his is the case at which the firm is constrained in eriod, and if the business consumers do arrive, the firm will not have any seats left for the third eriod We can consider two cases in eriod : If business consumers do not arrive during the second eriod, the initial caacity is given by = In this case, the firm is constrained during the third eriod and has to adjust the third-eriod rice accordingly hus, demand at rice is = olving this equality, we determine that the third-eriod rice is and If business consumers arrive during the second eriod, there is no caacity left for the third eriod; in other words, 0 In eriod, the firm is also restricted by the initial caacity and the demand at rice, = olving this equality, we determine that the second-eriod rice is Recall that he second-eriod eected rofits are, which yields 0

11 We now use the fact that is the marginal consumer for whom the utility from urchasing the ticket in eriod is eactly equal to the utility from waiting and buying the ticket in eriod his fact yields the following equation for : = - θ ubstituting and solving for yields In eriod, the eected rofits are given by aimization with resect to rice yields It is easy to verify that < α hus, under this caacity range, the firm sells to some tourist consumers during the first eriod and to other tourist consumers during the third eriod o find out what is, note that this case is valid only if is smaller than the unconstrained demand in eriod he latter is equal to Recall that and substituting into this equation yields = ow aacity: < If caacity is lower than the unconstrained demand in eriod,, the firm has no incentive to sell tickets in eriod ince if the business consumers arrive in eriod it sells in higher rice to all of them and if they do not arrive it sells the same seats to tourists in eriod hus, in this case, no rice discrimination within the tourist segment is ossible Proosition : We assume that the tourist segment is slit into two sub-segments A fraction -δ of the consumers arrives at eriod 0 and has a valuation for the flight that is drawn from a uniform distribution 0,, where < / he rest of the tourist segment δ arrives in eriod one with valuation for the flight that is drawn from a uniform distribution, We resent only the case which is equivalent to the low-intermediate caacity of the revious case Proosition 5;, where U and U Define the caacity at the beginning of the i th eriod as i Recall that, due to uncertainty about business consumers arrival, the initial caacity at the beginning of the third eriod can be = if

12 business consumers do not arrive or = if business consumers do arrive We also define to be the tourist with the highest utility that will urchase a ticket in eriod at rice Recall that this consumer is indifferent between urchasing a ticket in eriod 0 at rice 0 and urchasing a ticket during eriod at rice We only consider the case where <, since if > the firm does not sell in eriod 0 and the roblem is reduced to the roblem we solved in Proosition 5 We consider two cases in eriod : If business consumers do not arrive during the second eriod, the initial caacity is given by = In this case, the firm is constrained during the third eriod and has to adjust the third-eriod rice accordingly Also, as we are interested in the case were <, then it means that the firm sets the monooly rice in eriod hus, demand at rice is = olving this equality, we determine that the third-eriod rice is and If business consumers arrive during the second eriod, there is no caacity left for the third eriod; in other words, 0 In eriod, the firm sells only for business consumers and maimizes the following eected rofits; with resect to If business consumers arrive during the second eriod, the initial caacity is given by; In this case, the firm is constrained during the second eriod and has to adjust the second-eriod rice accordingly hus In eriod the firm maimizes the following eected rofits; his otimization roblem yields In eriod 0, we use the fact that is the marginal consumer for whom the utility from urchasing the ticket in eriod 0 is eactly equal to the utility from waiting and buying the ticket in eriod his fact yields the following equation for : 0 = - θ - ubstituting and solving for yields; 0 In eriod 0, the eected rofits are given 0 by 0 aimization with resect to rice yields that < 0 It can be shown he eressions for and 0 can be retrieved from the authors by request

The Maximal Damage Paradigm in Antitrust Regulation: Is it Something New?

The Maximal Damage Paradigm in Antitrust Regulation: Is it Something New? The Maximal Damage Paradigm in Antitrust Regulation: Is it Something New? It is well known that cartels are harmful for consumers. To counteract cartels, cartel formation is by law an economic crime with

More information

Resource Allocation and Decision Analysis (ECON 8010) Spring 2014 Alternative Competitive Environments portions for Exam 1

Resource Allocation and Decision Analysis (ECON 8010) Spring 2014 Alternative Competitive Environments portions for Exam 1 Resource Allocation and ecision Analysis (ECON 81) Sring 214 Alternative Cometitive Environments ortions for Exam 1 efinitions and Concets: Profit Total Revenues us Total. Primary objective of most rivate

More information

An Analysis of Profit and Consumer Surplus Implications of Resale

An Analysis of Profit and Consumer Surplus Implications of Resale An Analysis of Profit and Consumer Surlus Imlications of Resale Qiong Wang 1, Jon M. Peha, Marvin A. Sirbu 3 Abstract When a monooly carrier rovides multile services(voice, data, video) through a single

More information

Economics of Strategy (ECON 4550) Maymester 2015 Overview of Alternative Competitive Environments

Economics of Strategy (ECON 4550) Maymester 2015 Overview of Alternative Competitive Environments Economics of Strategy (ECON 4) Maymester 2 Overview of Alternative Cometitive Environments Definitions and Concets: Profit Total Revenues minus Total Costs. Primary objective of most rivate enterrise is

More information

Three-Level Service Contract between Manufacturer, Agent and Customer (Game Theory Approach)

Three-Level Service Contract between Manufacturer, Agent and Customer (Game Theory Approach) Proceedings of the 0 International Conference on Industrial Engineering and Oerations Management Istanbul, Turkey, July 6, 0 Three-evel Service Contract between Manufacturer, Agent and Customer (Game Theory

More information

Price Elasticity of Demand MATH 104 Mark Mac Lean 2017W

Price Elasticity of Demand MATH 104 Mark Mac Lean 2017W Price Elasticity of Demand MATH 104 Mark Mac Lean 2017W The rice elasticity of demand (which is often shortened to demand elasticity) is defined to be the ercentage change in quantity demanded, q, divided

More information

4/14/2016. Intermediate Microeconomics W3211. Lecture 18: Equilibrium with Firms 2. Today. The Story So Far. Quantity Taxes.

4/14/2016. Intermediate Microeconomics W3211. Lecture 18: Equilibrium with Firms 2. Today. The Story So Far. Quantity Taxes. 1 Intermediate Microeconomics W3211 Lecture 18: Equilibrium with Firms 2 Introduction Columbia University, Sring 2016 Mark Dean: mark.dean@columbia.edu 2 The Story So Far. 3 Today 4 Last lecture we talked

More information

Partial equilibrium analysis: Competitive markets

Partial equilibrium analysis: Competitive markets Partial equilibrium analysis: Cometitive markets Lectures in Microeconomic Theory Fall 2009, Part 16 02.09.2009 G.B. Asheim, ECON4230-35, #16 1 Partial vs. general equilibrium analysis In a artial equilibrium

More information

Can Unobserved Heterogeneity in Farmer Ability Explain the Inverse Relationship between Farm Size and Productivity?

Can Unobserved Heterogeneity in Farmer Ability Explain the Inverse Relationship between Farm Size and Productivity? Can Unobserved Heterogeneity in Farmer Ability Exlain the Inverse Relationshi between Farm Size and Productivity? Juliano J. Assunção Maitreesh Ghatak Abstract The well-known inverse relationshi between

More information

Family Plans: Market Segmentation by Bundling Consumers

Family Plans: Market Segmentation by Bundling Consumers amily Plans: Market Segmentation by Bundling Consumers Bo Zhou Preliminary & Incomlete Draft June 013 Bo Zhou (bo.zhou@duke.edu) is a PhD student in Marketing at the uua School of Business, Duke University,

More information

ABSTRACT STRATEGIES IN OLIGOPOLIES. This dissertation is part of the effort to contribute to our understanding of Price

ABSTRACT STRATEGIES IN OLIGOPOLIES. This dissertation is part of the effort to contribute to our understanding of Price STRCT Title of Dissertation: ESSYS ON PRICE COMPETITION ND IRM STRTEGIES IN OLIGOPOLIES Heisnam Thoihen Singh, Doctor of Philosohy 007 Dissertation directed by: Professor Daniel Vincent Deartment of Economics

More information

Examination 2 Fall 2005

Examination 2 Fall 2005 Economics 5 Eamination Fall 5 A. Key. Consider a market with linear demand as illustrated below: $ 8 Demand 4 5,,5 Q a) s demand elastic, inelastic, or unit elastic at a rice of = 5? Elain. (6 oints) For

More information

* Ravi Gor 1 and Ashok Patel 2. * Author for Correspondence

* Ravi Gor 1 and Ashok Patel 2. * Author for Correspondence A SINGLE PERIOD MODEL WHERE THE LOST SALES RECAPTURE IS A FUNCTION OF log m 1 r Ravi Gor 1 and Ashok Patel 2 1 Dr. Baba Saheb Ambedkar Oen University, Gujarat 2 P.S. Science and H. D Patel Arts College,

More information

Consumption, Production, Welfare B: Competitive markets (partial eq) Univ. Prof. dr. Maarten Janssen University of Vienna Winter semester 2015

Consumption, Production, Welfare B: Competitive markets (partial eq) Univ. Prof. dr. Maarten Janssen University of Vienna Winter semester 2015 Consumtion, Production, Welfare B: Cometitive markets (artial eq) Univ. Prof. dr. Maarten Janssen University of Vienna Winter semester 2015 Must individual suly curve always be uward sloing? Suly curve

More information

Pricing Damaged Goods

Pricing Damaged Goods February 6, 2007 Pricing Damaged Goods by R. Preston McAfee California Institute of Technology Abstract: Comanies with market ower occasionally engage in intentional quality reduction of a ortion of their

More information

The Firm and the Market

The Firm and the Market Almost essential Firm: Demand and Suly The Firm and the Market MICROECONOMICS Princiles and Analysis Frank Cowell October 2005 Introduction In revious resentations we ve seen how an otimising agent reacts

More information

Output Measurement of Travel Arrangement and Reservation Services

Output Measurement of Travel Arrangement and Reservation Services Output Measurement of Travel Arrangement and Reservation Services Content 1 Overview of the industry 2 Gross revenue 3 Net revenue 4 Measurement methods and issues 5 Evaluation of Methods 1 Travel Arrangement

More information

Price Discrimination in the Digital Economy*

Price Discrimination in the Digital Economy* Price Discrimination in the Digital Economy Drew Fudenberg (Harvard University) J. Miguel Villas-Boas (University of California, Berkeley) May 2012 ABSTRACT With the develoments in information technology

More information

THE FIRM AND THE MARKET

THE FIRM AND THE MARKET Prerequisites Almost essential Firm: Demand and Suly THE FIRM AND THE MARKET MICROECONOMICS Princiles and Analysis Frank Cowell Note: the detail in slides marked * can only be seen if you run the slideshow

More information

Full terms and conditions of use:

Full terms and conditions of use: This article was downloaded by: [37.44.194.191] On: 05 February 2018, At: 19:02 Publisher: Institute for Oerations Research and the Management Sciences (INFORMS) INFORMS is located in Maryland, USA Management

More information

Planning and Design of Flex-Route Transit Services

Planning and Design of Flex-Route Transit Services Transortation Research Record 1791 59 Paer No. 2-2324 Planning and Design of Flex-Route Transit Services Liing Fu A theoretical investigation is resented of various issues involved in the lanning and design

More information

The Firm and the Market

The Firm and the Market Prerequisites Almost essential Firm: Demand and Suly The Firm and the Market MICROECONOMICS Princiles and Analysis Frank Cowell October 2005 Introduction In revious resentations we ve seen how an otimising

More information

Economics Introduction. Why Monopolies Arise. Why Monopolies Arise. Monopoly vs. Competition: Demand Curves

Economics Introduction. Why Monopolies Arise. Why Monopolies Arise. Monopoly vs. Competition: Demand Curves 9.8. C H A T E R 5 In this chapter, look for the answers to these questions: E Monopoly RINCILES OF Economics I N. Gregory Mankiw remium oweroint Slides by Ron Cronovich 9 South-Western, a part of Cengage

More information

The Impact of Demand Uncertainty on Consumer Subsidies for Green Technology Adoption

The Impact of Demand Uncertainty on Consumer Subsidies for Green Technology Adoption The Imact of Demand Uncertainty on Consumer Subsidies for Green Technology Adotion Maxime C. Cohen Oerations Research Center, MIT, Cambridge, MA 02139, maxcohen@mit.edu Ruben Lobel The Wharton School,

More information

The Win-win Mechanism of Loyalty Programs Partnerships: Considering the Customer Heterogeneity

The Win-win Mechanism of Loyalty Programs Partnerships: Considering the Customer Heterogeneity Association for Information Systems AIS Electronic Library (AISeL WHICEB 013 Proceedings Wuhan International Conference on e-business Summer 5-5-013 The Win-win Mechanism of Loyalty Programs Partnershis:

More information

The B.E. Journal of Economic Analysis & Policy

The B.E. Journal of Economic Analysis & Policy The BE Journal of Economic Analysis & Policy Contributions Volume, Issue 0 Article 50 Cometitive Mixed Bundling of Vertically Differentiated Products Illtae Ahn Kiho Yoon Chung-Ang University, illtae@cauackr

More information

Vertical Differentiation with Variety-seeking Consumers

Vertical Differentiation with Variety-seeking Consumers Vertical Differentiation with Variety-seeking Consumers Robert Zeithammer UCA Anderson School of Management Rahael Thomadsen UCA Anderson School of Management Aril, 0 Abstract We analyze rice and quality

More information

NBER WORKING PAPER SERIES PRICE DISPERSION UNDER COSTLY CAPACITY AND DEMAND UNCERTAINTY. Diego Escobari Li Gan

NBER WORKING PAPER SERIES PRICE DISPERSION UNDER COSTLY CAPACITY AND DEMAND UNCERTAINTY. Diego Escobari Li Gan BER WORKIG PAPER SERIES PRICE DISPERSIO UDER COSTLY CAPACITY AD DEMAD UCERTAITY Diego Escobari Li Gan Woring Paer 375 htt://www.nber.org/aers/w375 ATIOAL BUREAU OF ECOOMIC RESEARCH 5 Massachusetts Avenue

More information

Price Differentiation

Price Differentiation Price Differentiation Page Outline Price Differentiation: Limitations and Tactics Volume Discounts Pricing with Arbitrage and Cannibalization Consumer Welfare Based on Phillis (005) Chater 4 Price differentiation:

More information

IN common production and inventory systems, the uncertainty. A Study of Compensation Problem for Uncertainty of Quality in Supply Chain

IN common production and inventory systems, the uncertainty. A Study of Compensation Problem for Uncertainty of Quality in Supply Chain Proceedings of the International MultiConference of Engineers and Comuter Scientists 2018 Vol II, March 14-16, 2018, Hong Kong A Study of Comensation Problem for Uncertainty of Quality in Suly Chain Yasuhiko

More information

Online shopping and platform design with ex ante registration requirements

Online shopping and platform design with ex ante registration requirements Online shopping and platform design with ex ante registration requirements O A Florian Morath Johannes Münster June 17, 2016 This supplementary appendix to the article Online shopping and platform design

More information

Professor Christina Romer LECTURE 6 FIRMS AND PROFIT MAXIMIZATION FEBRUARY 1, 2018

Professor Christina Romer LECTURE 6 FIRMS AND PROFIT MAXIMIZATION FEBRUARY 1, 2018 Economics 2 Spring 2018 rofessor Christina Romer rofessor David Romer LECTURE 6 FIRMS AND ROFIT MAXIMIZATION FEBRUARY 1, 2018 I. FIRMS AND THE DECISIONS THEY MAKE A. What is a firm? B. Three decisions

More information

Asymmetric Information and. Limited Information about Price Tourists and Natives. Informed and Uninformed Customers. Few informed customers 11/6/2009

Asymmetric Information and. Limited Information about Price Tourists and Natives. Informed and Uninformed Customers. Few informed customers 11/6/2009 symmetric Information and dvertising i Industrial Organization K. Graddy Limited Information about Price Tourists and Natives n Exlanation for Price Disersion ll firms ave identical costs Two tyes of consumers

More information

Competition with Shared Spectrum

Competition with Shared Spectrum ometition with Shared Sectrum hang Liu S eartment Northwestern University, vanston, IL 628 mail: changliu22@u.northwestern.edu Randall. erry S eartment Northwestern University, vanston, IL 628 mail: rberry@eecs.northwestern.edu

More information

Monopoly single producer strong barriers to entry price marker no close substitute discriminates the price

Monopoly single producer strong barriers to entry price marker no close substitute discriminates the price Monopoly A monopoly market form exists when the output of an entire industry is produced and sold by a single firm. he word monopoly is derived from two Greek words monos means one and polein means to

More information

Optimal Dynamic Pricing of Perishable Products Considering Quantity Discount Policy

Optimal Dynamic Pricing of Perishable Products Considering Quantity Discount Policy Journal of Information & Computational Science 10:14 (013) 4495 4504 September 0, 013 Available at http://www.joics.com Optimal Dynamic Pricing of Perishable Products Considering Quantity Discount Policy

More information

Perfect price discrimination (PPD) 1 Graph. Monopolist sells product with downward-sloping demand curve Each consumer demands one unit: demand curve

Perfect price discrimination (PPD) 1 Graph. Monopolist sells product with downward-sloping demand curve Each consumer demands one unit: demand curve Price discrimination Up to now, consider situations where each firm sets one uniform price Consider cases where firm engages in non-uniform pricing: 1. Charging customers different prices for the same

More information

Labor required One computer One sack of rice in N in S 40 20

Labor required One computer One sack of rice in N in S 40 20 Solutions Seminar 6 2 a) Labor required One comuter One sack of rice in 10 15 in S 40 20 The revenue from adding an extra worker to the comuter industry is P c /10 while the revenue from adding an extra

More information

MARKET TRANSPARENCY STRATEGY IN E-COMMERCE: MODELING AND EMPIRICAL ANALYSIS. Nelson Granados Doctoral Program. Alok Gupta Associate Professor

MARKET TRANSPARENCY STRATEGY IN E-COMMERCE: MODELING AND EMPIRICAL ANALYSIS. Nelson Granados Doctoral Program. Alok Gupta Associate Professor MARKE RANSPARENCY SRAEGY IN E-COMMERCE: MODELING AND EMPIRICAL ANALYSIS Nelson Granados Doctoral Program Alok Guta Associate Professor Robert J. Kauffman Director, MIS Research Center, and Professor and

More information

Columbia Business School Problem Set 7: Solution

Columbia Business School Problem Set 7: Solution Columbia Business School roblem Set 7: Solution art 1: art a: The definition of elasticity is: ε d The term / is simply the slope of the demand function (p). (Note that this is the reciprocal of the slope

More information

Competitive Strategy: Week 6. Dynamic Pricing

Competitive Strategy: Week 6. Dynamic Pricing Competitive Strategy: Week 6 Dynamic Pricing Simon Board Eco380, Competitive Strategy 1 Capacity Choice Consider a building a stadium for the olympics. Demand is given by p(q) = a q. Firm chooses capacity

More information

Econ Microeconomic Analysis and Policy

Econ Microeconomic Analysis and Policy ECON 500 Microeconomic Theory Econ 500 - Microeconomic Analysis and Policy Monopoly Monopoly A monopoly is a single firm that serves an entire market and faces the market demand curve for its output. Unlike

More information

Frequent flyer programs and dynamic contracting with limited commitment

Frequent flyer programs and dynamic contracting with limited commitment Frequent flyer programs and dynamic contracting with limited commitment Emil Temnyalov October 14, 2014 Abstract I present a novel contract theoretic explanation of the profitability and management of

More information

Monopoly Monopoly 2: Price Discrimination and Natural Monopoly Allan Collard-Wexler Econ 465 Market Power and Public Policy September 13, / 28

Monopoly Monopoly 2: Price Discrimination and Natural Monopoly Allan Collard-Wexler Econ 465 Market Power and Public Policy September 13, / 28 Monopoly Monopoly 2: Price Discrimination and Natural Monopoly Allan Collard-Wexler Econ 465 Market Power and Public Policy September 13, 2016 1 / 28 Monopoly Overview Definition: A firm is a monopoly

More information

Targeted advertising and consumer information

Targeted advertising and consumer information Targeted advertising and consumer information Job Market Paer. Sébastien Broos November 2016 Abstract Using ever-increasing amounts of data, firms are able to link the valuations of consumers with the

More information

microeconomics II first module

microeconomics II first module Kosmas Marinakis, Ph.D. Before we begin Lecture 11 Oligooly art IIΙ microeconomics II first module Test Homework 4 available due next Monday Voice recordings in the lecture are rohibited Disincentive to

More information

Durable Goods Monopoly with Endogenous Quality

Durable Goods Monopoly with Endogenous Quality Durable Goods Monopoly with Endogenous Quality Jong-Hee Hahn Keele University (Preliminary) March 30, 2004 Abstract This paper examines the dynamic pricing problem of a durable-good monopolist when product

More information

Preface. Chapter 1 Basic Tools Used in Understanding Microeconomics. 1.1 Economic Models

Preface. Chapter 1 Basic Tools Used in Understanding Microeconomics. 1.1 Economic Models Preface Chapter 1 Basic Tools Used in Understanding Microeconomics 1.1 Economic Models 1.1.1 Positive and Normative Analysis 1.1.2 The Market Economy Model 1.1.3 Types of Economic Problems 1.2 Mathematics

More information

Optimal Reverse-Pricing Mechanisms

Optimal Reverse-Pricing Mechanisms Otimal Reverse-Pricing Mechanisms Martin Sann 1 Robert Zeithammer Gerald Häubl 3 February 19, 010 Abstract Reverse ricing is a market mechanism under which a consumer s bid for a roduct leads to a sale

More information

Inventory Policies for Price-Sensitive Stock-Dependent Demand and Quantity Discounts

Inventory Policies for Price-Sensitive Stock-Dependent Demand and Quantity Discounts Inventory Policies for Price-Sensitive Stock-Deendent Demand and uantity Discounts Nita H. Shah 1*, Monika K. Naik 2 Deartment of Mathematics, Guarat University Ahmedabad-380009, Guarat, India Email: 1

More information

Credence goods. Even when the success of the service is observable to the consumer ex post, consumers typically

Credence goods. Even when the success of the service is observable to the consumer ex post, consumers typically Credence goods Credence goods: products and services purchased from informed experts such as auto mechanics, home improvement contractors, appliance service-persons, physicians, lawyers... The provider

More information

Reputation Based Buyer Strategy For Seller Selection For Both Frequent and Infrequent Purchases

Reputation Based Buyer Strategy For Seller Selection For Both Frequent and Infrequent Purchases Reutation Based Buyer Strategy For Seller Selection For Both Frequent and Infrequent Purchases Abstr. Previous research in the area of buyer strategies for choosing sellers in ecommerce markets has focused

More information

International Master of Science in Business Economics. Economics of Business and Markets. Problem Set 1. Fátima Barros November 19, 2010

International Master of Science in Business Economics. Economics of Business and Markets. Problem Set 1. Fátima Barros November 19, 2010 International Master of cience in usiness Economics Economics of usiness and Markets roblem et Fátima arros ovember 9, 00 Eercise. In the United tates concentration ratios are published by the government

More information

The Economics of E-commerce and Technology. Dynamic Pricing

The Economics of E-commerce and Technology. Dynamic Pricing The Economics of E-commerce and Technology Dynamic Pricing 1 Peak Load Pricing Suppose a firm has zero marginal cost, with capacity K Broadband capacity, cell phone towers, hotel rooms Capacity costs z

More information

Positive Mathematical Programming: a Comparison of Different Specification Rules

Positive Mathematical Programming: a Comparison of Different Specification Rules Positive Mathematical Programming: a Comarison of Different Secification Rules Fragoso R., Carvalho M.L. and Henriques P.D. 3 University of Évora/Management Deartment/ ICAM, rfragoso@uevora.t, Évora, Portugal

More information

A Model of Airline Pricing: Capacity Constraints and Deadlines

A Model of Airline Pricing: Capacity Constraints and Deadlines A Model of Airline Pricing: Capacity Constraints and Deadlines Shubhro Sarkar Abstract We study monopolistic pricing, with a capacity constraint, of a good that loses its value after three periods. In

More information

SECOND-DEGREE PRICE DISCRIMINATION (P-R pp )

SECOND-DEGREE PRICE DISCRIMINATION (P-R pp ) ECO 300 Fall 2005 November 5 MONOPOLY PART 2 SECOND-DEGREE PRICE DISCRIMINATION (P-R pp. 386-7) This is an imperfect attempt to extract some consumer surplus using quantity discounts, usually in blocks

More information

Targeted advertising and consumer information

Targeted advertising and consumer information Targeted advertising and consumer information Very reliminary, do not circulate Sébastien Broos August 2016 Abstract We consider how a single roduct monoolist should target its ads if there is some correlation

More information

Monopoly. John Asker Econ 170 Industrial Organization January 22, / 1

Monopoly. John Asker Econ 170 Industrial Organization January 22, / 1 Monopoly John Asker Econ 170 Industrial Organization January 22, 2017 1 / 1 Monopoly Overview Definition: A firm is a monopoly if it is the only supplier of a product in a market. A monopolist s demand

More information

Family Plans: Market Segmentation with Nonlinear Pricing. Abstract

Family Plans: Market Segmentation with Nonlinear Pricing. Abstract amily Plans: Market Segmentation with Nonlinear Pricing Preyas S. Desai, 1 Devavrat Purohit, 2 Bo Zhou 3 November 25, 2014 Preliminary Draft Abstract In the telecommunications market, firms often give

More information

Optimizing Empty Containers Distribution among Ports

Optimizing Empty Containers Distribution among Ports Journal of Mathematics and tatistics 7 (3): 26-22, 20 IN 549-3644 20 cience ublications Otimizing Emty Containers Distribution among orts Mohammed A. Hajeeh and Weam Behbehani Techno-Economics Division,

More information

Problem Set #2 - Answers. Due February 2, 2000

Problem Set #2 - Answers. Due February 2, 2000 S/Econ 573 roblem Set # - Answers age 1 of 11 roblem Set # - Answers ue February, [Numbers in brackets are the points allocated in the grading. There are 13 points total] 1. [19]In the figure at the right

More information

Lecture Two SHORT-RUN AND LONG-RUN PRICING-OUTPUT DECISION IN A MONOPOLY MARKET

Lecture Two SHORT-RUN AND LONG-RUN PRICING-OUTPUT DECISION IN A MONOPOLY MARKET EDO UNIVERSITY IYAMHO COURSE CODE: ECO 311 COURSE TITLE: Intermediate Microeconomics NUMBER OF UNITS: Three COURSE LECTURER: Dr. (Mrs.) Evelyn Ogbeide-Osaretin Lecture Two SHORT-RUN AND LONG-RUN RICING-OUTUT

More information

Professor Christina Romer SUGGESTED ANSWERS TO PROBLEM SET 2

Professor Christina Romer SUGGESTED ANSWERS TO PROBLEM SET 2 Economics 2 Spring 2016 rofessor Christina Romer rofessor David Romer SUGGESTED ANSWERS TO ROBLEM SET 2 1.a. Recall that the price elasticity of supply is the percentage change in quantity supplied divided

More information

Estimating unconstrained customer choice set demand: A case study on airline reservation data

Estimating unconstrained customer choice set demand: A case study on airline reservation data Estimating unconstrained customer choice set demand: A case study on airline reservation data Alwin Haensel 1 Ger Koole 1 Jeroen Erdman 2 1 Department of Mathematics, VU University Amsterdam, De Boelelaan

More information

Uniform and Targeted Advertising with Shoppers and. Asymmetric Loyal Market Shares

Uniform and Targeted Advertising with Shoppers and. Asymmetric Loyal Market Shares Uniform and Targeted dvertising with Shoppers and symmetric Loyal Market Shares Michael rnold, Chenguang Li and Lan Zhang October 9, 2012 Preliminary and Incomplete Keywords: informative advertising, targeted

More information

Monopoly. Monopoly 4: Durable Goods. Allan Collard-Wexler Econ 465 Market Power and Public Policy September 16, / 14

Monopoly. Monopoly 4: Durable Goods. Allan Collard-Wexler Econ 465 Market Power and Public Policy September 16, / 14 Monopoly Monopoly 4: Durable Goods Allan Collard-Wexler Econ 465 Market Power and Public Policy September 16, 2016 1 / 14 Monopoly Overview Definition: A firm is a monopoly if it is the only supplier of

More information

Lecture 3: Further static oligopoly Tom Holden

Lecture 3: Further static oligopoly Tom Holden Lecture 3: Further static oligopoly Tom Holden http://io.tholden.org/ Game theory refresher 2 Sequential games Subgame Perfect Nash Equilibria More static oligopoly: Entry Welfare Cournot versus Bertrand

More information

Rationing Poor Consumers to Reduce Prices

Rationing Poor Consumers to Reduce Prices Rationing Poor Consumers to Reduce Prices Simona Grassi Ching-to Albert Ma Max Weber Fellow Department of Economics European University Institute Boston University Villa La Fonte, Via Delle Fontanelle,

More information

ECON 2100 Principles of Microeconomics (Fall 2018) Price Discrimination, Product Differentiation, and Bundling

ECON 2100 Principles of Microeconomics (Fall 2018) Price Discrimination, Product Differentiation, and Bundling ECON Princiles of Microeconomics (Fall 8) Price Discrimination, Product Differentiation, and Bundling elevant readings from the textook: Mankiw, Ch. 5 Monooly Suggested rolems from the textook: Chater

More information

Manufacturer-Retailer Pricing Competition Across Multiple Product Categories: An Equilibrium Framework

Manufacturer-Retailer Pricing Competition Across Multiple Product Categories: An Equilibrium Framework Manufacturer-Retailer Pricing Cometition Across Multile Product Categories: An Equilibrium Framework Benjamin Kartono Nanyang Technological University This aer investigates ricing cometition between manufacturers

More information

Third degree price discrimination. Welfare Analysis

Third degree price discrimination. Welfare Analysis Third degree price discrimination Welfare Analysis Third-degree rice discrimination and welfare Does third-degree price discrimination reduce welfare? not the same as being fair relates solely to efficiency

More information

Econ 101A Solutions for Final exam - Fall 2006

Econ 101A Solutions for Final exam - Fall 2006 Econ 101A Solutions for Final exam - Fall 2006 Problem 1. Shorter problems. (35 points) Solve the following shorter problems. 1. Consider the following (simultaneous) game of chicken. This is a game in

More information

Professor Christina Romer LECTURE 7 FIRMS AND PROFIT MAXIMIZATION FEBRUARY 9, 2016

Professor Christina Romer LECTURE 7 FIRMS AND PROFIT MAXIMIZATION FEBRUARY 9, 2016 Economics 2 Spring 2016 rofessor Christina Romer rofessor David Romer LECTURE 7 FIRMS AND ROFIT MAXIMIZATION FEBRUARY 9, 2016 I. FIRMS AND THE DECISIONS THEY MAKE A. What is a firm? B. Three decisions

More information

Optimal selling strategies when buyers name their own prices

Optimal selling strategies when buyers name their own prices Otimal selling strategies when buyers name their own rices Robert Zeithammer August 4, 04 Abstract: This aer models a name-your-own-rice (NYOP) retailer who allows buyers to initiate their retail interaction

More information

Professor Christina Romer LECTURE 7 COMPETITIVE FIRMS IN THE LONG RUN FEBRUARY 6, 2018

Professor Christina Romer LECTURE 7 COMPETITIVE FIRMS IN THE LONG RUN FEBRUARY 6, 2018 Economics 2 Spring 2018 rofessor Christina Romer rofessor David Romer LECTURE 7 COMETITIVE FIRMS IN THE LONG RUN FEBRUARY 6, 2018 I. A LITTLE MORE ON SHORT-RUN ROFIT-MAXIMIZATION A. The condition for short-run

More information

International Master of Science in Business Economics Economics of Business and Markets. Problem Set 2

International Master of Science in Business Economics Economics of Business and Markets. Problem Set 2 International Master of cience in Business Economics Economics of Business and Markets roblem et Fátima Barros To be delivered until December, 9 Eercise Consider that a new electronic store, M-U, enters

More information

1.. There are two complementary goods that are consumed together (each individual good

1.. There are two complementary goods that are consumed together (each individual good University of California, Davis Department of Economics Time: 3 hours Reading time: 20 minutes PRELIMINARY EXAMINATION FOR THE Ph.D. DEGREE Industrial Organization June 22, 2004 Answer four of the six

More information

Monopoly. The single seller or firm referred to as a monopolist or monopolistic firm. Characteristics of a monopolistic industry

Monopoly. The single seller or firm referred to as a monopolist or monopolistic firm. Characteristics of a monopolistic industry Monopoly Monopoly: a market structure in which there is only one seller of a good or service that has no close substitutes and entry to the market is completely blocked. The single seller or firm referred

More information

ECON 8010 (Spring 2012) Exam 3

ECON 8010 (Spring 2012) Exam 3 ECON 8010 (Spring 2012) Exam 3 Name _A. Key Multiple Choice Questions: (4 points each) 1. Which of the following is NOT one of the three basic elements of a game? D. None of the above answers is correct

More information

Seminar 3 Monopoly. Simona Montagnana. Week 25 March 20, 2017

Seminar 3 Monopoly. Simona Montagnana. Week 25 March 20, 2017 Seminar 3 Monopoly Simona Montagnana Week 25 March 20, 2017 2/41 Question 2 2. Explain carefully why a natural monopoly might occur. a Discuss the problem of using marginal cost pricing to regulate a natural

More information

VERSION 1. Economics 101 Lec 3 Elizabeth Kelly Fall 2000 Midterm #3 / Version #1 December 4, Student Name: ID Number: Section Number: TA Name:

VERSION 1. Economics 101 Lec 3 Elizabeth Kelly Fall 2000 Midterm #3 / Version #1 December 4, Student Name: ID Number: Section Number: TA Name: Economics 101 Lec 3 Elizabeth Kelly Fall 2000 Midterm #3 / Version #1 December 4, 2000 VERSION 1 TF+MC roblem Total Student Name: ID Number: Section Number: TA Name: NOTE: This information and the similar

More information

Economics. Monopoly 11/29/2013. Introduction. Why Monopolies Arise. Why Monopolies Arise. Principles of

Economics. Monopoly 11/29/2013. Introduction. Why Monopolies Arise. Why Monopolies Arise. Principles of N. Gregory Mankiw rinciples of Economics Sixth Edition In this chapter, look for the answers to these questions: Why do monopolies arise? Why is < for a monopolist? How do monopolies choose their and?

More information

Asset Price Bubbles and Endogenous Growth [PRELIMINARY DRAFT] Abstract

Asset Price Bubbles and Endogenous Growth [PRELIMINARY DRAFT] Abstract Asset Price Bubbles and Endogenous Growth [PRELIMINARY DRAFT] Jong Kook Shin 1 Chetan Subramanian 2 Abstract This paper extends a simple Schumpeterian growth model to demonstrate that bubbles can generate

More information

Economic Evaluation of Transformer Selection in Electrical Power Systems

Economic Evaluation of Transformer Selection in Electrical Power Systems Economic Evaluation of Transformer Selection in Electrical Power Systems Eleftherios I. Amoiralis, Marina A. Tsili, Antonios G. Kladas Φ Abstract Owning to deregulation, rivatization and cometition, estimating

More information

THE CHOICE OF REVERSE LOGISTICS RECYCLING MODEL IN THE NONLINEAR DEMAND

THE CHOICE OF REVERSE LOGISTICS RECYCLING MODEL IN THE NONLINEAR DEMAND Journal of athematical Sciences: dvances and lications Volume 9 016 ages 9-61 vailale at htt://scientificadvancescoin DOI: htt://dxdoiorg/101864/jmsaa_710011660 THE CHOICE OF EVESE LOGISTICS ECYCLING ODEL

More information

Problem Set 1, due Thursday, February 11 th, 2016

Problem Set 1, due Thursday, February 11 th, 2016 Econ 1C: Princiles of Economics Problem Set 1, due Thursday, February 11 th, 216 Discrete demand 1. Suose that Ariel s total benefit from coffee drinks er day is given by the table on the left. coffee

More information

Part IV. Pricing strategies and market segmentation

Part IV. Pricing strategies and market segmentation Part IV. Pricing strategies and market segmentation Chapter 8. Group pricing and personalized pricing Slides Industrial Organization: Markets and Strategies Paul Belleflamme and Martin Peitz Cambridge

More information

Chapter 1 Introduction to Pricing Techniques

Chapter 1 Introduction to Pricing Techniques Chapter 1 Introduction to Pricing Techniques 1.1 Services, Booking Systems, and Consumer Value 2 1.1.1 Service definitions 1.1.2 Dynamic reservation systems 1.1.3 Consumer value 1.2 Overview of Pricing

More information

Search markets: Introduction

Search markets: Introduction Search markets: Introduction Caltech Ec106 (Caltech) Search Feb 2010 1 / 16 Why are prices for the same item so different across stores? (see evidence) A puzzle considering basic economic theory: review

More information

WATER SUPPLY INTERRUPTION: DOES LENGTH MATTER? AN EMPIRICAL APPLICATION TO RESIDENTIAL USERS IN SEVILLE

WATER SUPPLY INTERRUPTION: DOES LENGTH MATTER? AN EMPIRICAL APPLICATION TO RESIDENTIAL USERS IN SEVILLE WATER SUPPLY INTERRUPTION: DOES LENGTH MATTER? AN EMPIRICAL APPLICATION TO RESIDENTIAL USERS IN SEVILLE Maria A. García-Valiñas a,b David Roibás a Abstract: EU Water Framework Directive leads to manage

More information

UC Berkeley Haas School of Business Economic Analysis for Business Decisions (EWMBA 201A) Fall 2013

UC Berkeley Haas School of Business Economic Analysis for Business Decisions (EWMBA 201A) Fall 2013 UC Berkeley Haas School of Business Economic Analysis for Business Decisions (EWMBA 201A) Fall 2013 Pricing with market power and oligopolistic markets (PR 11.1-11.4 and 12.2-12.5) Module 4 Sep. 28, 2013

More information

UC Berkeley Haas School of Business Economic Analysis for Business Decisions (EWMBA 201A)

UC Berkeley Haas School of Business Economic Analysis for Business Decisions (EWMBA 201A) UC Berkeley Haas School of Business Economic Analysis for Business Decisions (EWMBA 201A) Monopoly and oligopoly (PR 11.1-11.4 and 12.2-12.5) Advanced pricing with market power and equilibrium oligopolistic

More information

Poaching in media: Harm to subscribers?

Poaching in media: Harm to subscribers? Poaching in media: Harm to subscribers? Elias Carroni Dipartimento di Scienze Economiche Alma, Universita di Bologna Published in Journal of Economics & Management Strategy, November 2017 2018.01.09 Yunhyoung

More information

MARKET TRANSPARENCY AND MULTI-CHANNEL STRATEGY: MODELING AND EMPIRICAL ANALYSIS OF ONLINE TRAVEL AGENTS. Nelson Granados Doctoral Program

MARKET TRANSPARENCY AND MULTI-CHANNEL STRATEGY: MODELING AND EMPIRICAL ANALYSIS OF ONLINE TRAVEL AGENTS. Nelson Granados Doctoral Program MARKE RANSPARENCY AND MULI-CHANNEL SRAEGY: MDELING AND EMPIRICAL ANALYSIS F NLINE RAVEL AGENS Nelson Granados Doctoral Program Alok Guta Associate Professor Robert J. Kauffman Director, MIS Research Center,

More information

econstor Make Your Publications Visible.

econstor Make Your Publications Visible. econstor Make Your Publications Visible. A Service of Wirtschaft Centre zbwleibniz-informationszentrum Economics van den Berg, Vincent A.C. Working Paer Tender Auctions with Existing Oerators Bidding Tinbergen

More information

The Robustness Of Non-Decreasing Dynamic Pricing Laura van der Bijl Research Paper Business analytics Aug-Oct 2017 Prof.

The Robustness Of Non-Decreasing Dynamic Pricing Laura van der Bijl Research Paper Business analytics Aug-Oct 2017 Prof. The Robustness Of Non-Decreasing Dynamic Pricing Laura van der Bijl Research Paper Business Analytics Aug-Oct 2017 The Robustness Of Non-Decreasing Dynamic Pricing Laura van der Bijl Laura.vanderbijl5@gmail.com

More information

Advance Selling, Competition, and Brand Substitutability

Advance Selling, Competition, and Brand Substitutability Advance Selling, Competition, and Brand Substitutability Oksana Loginova October 27, 2016 Abstract This paper studies the impact of competition on the benefits of advance selling. I construct a two-period

More information

Private Information and Endogenous Matching in Supply Chains: Theory and Experiments

Private Information and Endogenous Matching in Supply Chains: Theory and Experiments Private Information and Endogenous Matching in Suly Chains: Theory and Exeriments Andrew M. Davis Samuel Curtis Johnson Graduate School of Management, Cornell SC Johnson College of Business, Cornell University,

More information

ECON 251 Practice Exam 2 Questions from Fall 2013 Exams

ECON 251 Practice Exam 2 Questions from Fall 2013 Exams ECON 251 Practice Exam 2 Questions from Exams Gordon spends all his income on spatulas and mixing bowls. Spatulas cost $4 and mixing bowls cost $12. Gordon has $60 of income and considers both spatulas

More information