Intertemporal price discrimination in storable goods markets
By: Igal Hendel, Aviv Nevo
Contributors: Nevo, Aviv; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16988; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16988.
Publisher: National Bureau of Economic Research
Published: 2011
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "We study intertemporal price discrimination when consumers can store for future consumption needs.  To make the problem tractable we offer a simple model of demand dynamics, which we estimate using market level data.  Optimal pricing involves temporary price reductions that enable sellers to discriminate between price sensitive consumers, who anticipate future needs, and less price-sensitive consumers.  We empirically quantify the impact of intertemporal price discrimination on profits and welfare.  We find that sales: (1) capture 25-30% of the profit gap between non-discriminatory and third degree price discrimination profits, and (2) increase total welfare"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 7/7/2011.

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