We study monopolistic pricing, with a capacity constraint, of a good that loses its value after three periods. In each period a continuum of buyers, each of whom might be one of two types, enter. Each of the buyers chooses either to make a purchase as soon as they enter, or to wait for a lower price. The price path is found to be strictly non-decreasing, u-shaped or horizontal for different pro...

A firm that knows that cutting price may trigger a price war must weigh present versus future gains and losses when considering such a move. The firm’s financial situation can affect how it values such tradeoffs. Using data on 14 major airlines between 1985 and 1992, I test the hypothesis that firms in worse financial condition are more likely to start price wars. Empirical results suggest that...

Market Year Average (MYA) prices enter into payment calculations for Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC), two commodity program alternatives available in the 2013 Farm Bill (see here for more details). The distribution of MYA prices will influence payment levels under both programs. Hence, quantifying the potential MYA price distributions is important for evaluating c...

The Dixit entry/exit real option model was applied to the entry/exit decisions of New York dairy farmers. For the cost structure of a 500-cow farm the entry milk price is $17.52 per hundredweight (cwt.) and the exit milk price is $10.84. For the 50-cow farm cost structure the entry price is higher at $23.71 per cwt., and the exit price is also higher at $13.48. If infinite numbers of representa...

This article investigates best-price clauses as a strategic device to facilitate collusion in a dynamic duopoly game. Best-price clauses guarantee rebates on the purchase price if a customer finds a better price after his purchase. Two different price clauses are distinguished: "most favored customer" and "meet or release." I examine the collusive potential of both clauses in a finite-horizon d...

A monopolist produces a good with two qualities. All consumers have the same valuation of the first quality, but their valuations of the second vary, and are their private information. A public agency can verify qualities, and make credible reports to consumers. In Full Quality Report, the public agency reports both qualities. In Average Quality Report, it reports a weighted average of qualitie...

In August, the price of the 62-year-old drug pyrimethamine (Daraprim), used to treat many potentially fatal parasitic infections, was increased practically overnight from$14 to$750per tablet. This colossal increase attracted renewed attention to generic pharmaceutical price spikes, prompting public outrage and a new round of proposals to address this issue. Over the past few years, increasing d...

in the french law, the properties of public entities and at the head of them, the properties of state are divided into public domain of public entities and private domain of public entities. the criterion of distinguishing of public properties of public entities is a procedural matter that has been taken from french doctrine, however the recent law of public entities ownership passed in 2006 ha...