Dynamic pricing of experience goods with learning
نویسنده
چکیده
We develop a dynamic pricing model of experience good between one seller and one buyer. The buyer can learn about how the product fits him by consumption. We characterize a class of equilibria in which the seller o↵ers low price to induce learning in the earlier period, followed by high price to extract the consequence of learning in the later period. Moreover, we show that shorter contract duration generates more learning.
منابع مشابه
Dynamic Pricing of New Experience Goods∗
We develop a dynamic model of experience goods pricing with independent private valuations. We show that the optimal paths of sales and prices can be described in terms of a simple dichotomy. In a mass market, prices are declining over time. In a niche market, the optimal prices are initially low followed by higher prices that extract surplus from the buyers with a high willingness to pay. We c...
متن کاملDynamic Pricing of New Experience Goods by Dirk Bergemann and Juuso Välimäki Cowles Foundation Paper No. 1175 Cowles Foundation for Research in Economics
We develop a dynamic model of experience goods pricing with independent private valuations. We show that the optimal paths of sales and prices can be described in terms of a simple dichotomy. In a mass market, prices are declining over time. In a niche market, the optimal prices are initially low followed by higher prices that extract surplus from the buyers with a high willingness to pay. We c...
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