Temporary boycotts as self-fulfilling disruptions of markets

We consider a two-period durable goods monopoly model with demand uncertainty. When uncertainty is non-multiplicative, there can be equilibria in which, whenever the period 0 price exceeds a threshold, then with positive probability all consumers boycott in period 0. A consumer who in period 0 would purchase in the non-boycott equilibrium is willing to join a boycott because a boycott prevents the firm from learning demand. This dampens period 1 prices on average and makes the boycott self-fulfilling. Connections to the bank runs literature are discussed. ∗This paper was inspired by an indirectly related project I am working on with Ray Deneckere. I would like to thank Huberto Ennis, Andrew John, Dan Levin, and Karl Shell for helpful suggestions.