Household Heterogeneity and Optimal Inter-Temporal Pricing for a Durable-Good Monopoly

• Main Author: KOH, Winston T. H.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2006
• Subjects: Durable good; monopoly; inter-temporal price discrimination; Econometrics; Industrial Organization
• Online Access: https://ink.library.smu.edu.sg/soe_research/227; https://ink.library.smu.edu.sg/context/soe_research/article/1226/viewcontent/Household_Heterogeneity_2006.pdf
• Institution: Singapore Management University

In this paper, I extend the analysis in Koh (2006) to examine the optimality of inter-temporal price discrimination for a durable-good monopoly in a model where infinitely-lived households consume both durable goods and a stream of non-durable goods subject to different inter-temporal budget constraints. I also consider the multi-dimensional setting where households differ in both inter-temporal budget constraints and the utilities they derive from the consumption of the durable good.