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Treating symmetric buyers asymmetrically.

Authors :
Banerjee, Shraman
Source :
International Journal of Economic Theory; Jun2024, Vol. 20 Issue 2, p159-181, 23p
Publication Year :
2024

Abstract

We investigate a finite‐horizon dynamic pricing problem of a seller under limited commitment. Even when the buyers are ex ante symmetric to the seller, the seller can charge different prices to different buyers. We show that under the class of posted‐price mechanisms this asymmetric treatment of symmetric buyers strictly revenue‐dominates symmetric treatment. The seller implements this by using a priority‐based deterministic tie‐breaking rule instead of using a random tie‐breaking rule. The effect of asymmetric treatment on revenue increment increases monotonically as we increase the time horizon of the game. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
17427355
Volume :
20
Issue :
2
Database :
Complementary Index
Journal :
International Journal of Economic Theory
Publication Type :
Academic Journal
Accession number :
177193513
Full Text :
https://doi.org/10.1111/ijet.12394