Price dispersion in duopolies with heterogeneous consumers

Maxim Sinitsyn

doi:10.1016/j.ijindorg.2008.07.001

Price dispersion in duopolies with heterogeneous consumers

Maxim Sinitsyn^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

12 Scopus citations

Abstract

In this paper, I modify Varian's [Varian, H.R. (1980). A model of sales, American Economic Review, 70(4), 651-659] model of sales to allow for heterogeneity in consumer preferences. I show that in mixed strategy equilibria each firm charges a finite number of prices. Using this characterization, I examine the effect of consumer heterogeneity on firms' optimal pricing strategies.

Original language	English (US)
Pages (from-to)	197-205
Number of pages	9
Journal	International Journal of Industrial Organization
Volume	27
Issue number	2
DOIs	https://doi.org/10.1016/j.ijindorg.2008.07.001
State	Published - Mar 2009
Externally published	Yes

Keywords

Heterogeneous consumers
Mixed equilibrium
Price dispersion

ASJC Scopus subject areas

Industrial relations
Aerospace Engineering
Economics and Econometrics
Economics, Econometrics and Finance (miscellaneous)
Strategy and Management
Industrial and Manufacturing Engineering

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10.1016/j.ijindorg.2008.07.001

Cite this

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title = "Price dispersion in duopolies with heterogeneous consumers",

abstract = "In this paper, I modify Varian's [Varian, H.R. (1980). A model of sales, American Economic Review, 70(4), 651-659] model of sales to allow for heterogeneity in consumer preferences. I show that in mixed strategy equilibria each firm charges a finite number of prices. Using this characterization, I examine the effect of consumer heterogeneity on firms' optimal pricing strategies.",

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AB - In this paper, I modify Varian's [Varian, H.R. (1980). A model of sales, American Economic Review, 70(4), 651-659] model of sales to allow for heterogeneity in consumer preferences. I show that in mixed strategy equilibria each firm charges a finite number of prices. Using this characterization, I examine the effect of consumer heterogeneity on firms' optimal pricing strategies.

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KW - Mixed equilibrium

KW - Price dispersion

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JF - International Journal of Industrial Organization

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Price dispersion in duopolies with heterogeneous consumers

Abstract

Keywords

ASJC Scopus subject areas

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