We study the effects of exclusionary contracts and market-share discounts (i.e., discounts conditioned on the share a firm receives of the customer’s total purchases) in an adverse selection model where firms supply differentiated products and compete in non-linear prices. We show that exclusionary contracts intensify the competition among the firms, increasing consumer surplus, improving effic...

We implement a simple two-shop search model in the laboratory with the aim to investigate if consumers behave differently in equivalent situations, where prices are displayed either as net prices or as gross prices with discounts . We compare treatments, where we either depict the known price of the first shop or the initially uncertain price of the second shop as a gross price with a discount,...

The standard monopoly pricing problem is re-considered when the buyer can disclose his type (e.g. age, income, experience) at some cost. In the optimal sales mechanism with costly disclosure, the seller posts a price list, including a “sticker price” available to any buyer and a schedule of discounts available to those who disclose certain types. Unambiguous welfare implications of such a prici...

We investigate the empirical behavior of ngram discounts within and across domains. When a language model is trained and evaluated on two corpora from exactly the same domain, discounts are roughly constant, matching the assumptions of modified Kneser-Ney LMs. However, when training and test corpora diverge, the empirical discount grows essentially as a linear function of the n-gram count. We a...

The standard monopoly pricing problem is re-considered when the buyer’s type (e.g. age, income, experience) can be credibly disclosed at some cost. In the optimal sales mechanism with costly disclosure, the seller posts a “sticker price” available to any buyer, as well as a schedule of discounts available to those who disclose certain types. Unambiguous welfare implications are available in the...

This study investigates when forced sales turn into fire sales by using a natural experiment which allows us to separate supply and demand effects: Forced sales result from sudden death of house owners and are thus unrelated to current market conditions. We find that forced sales result in fire sale discounts. Discounts increase when the sale is urgent, market conditions are poor, the seller is...