The Micro-Foundations of Intertemporal Price Discrimination

This paper investigates the optimality of intertemporal price discrimination for a durable-good monopoly in a model where infinitely-lived households face an intertemporal budget constraint, and consume both durable goods and non-durable goods. We prove that the optimal price of the durable good is...

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Main Author: KOH, Winston T. H.
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2006
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Online Access:https://ink.library.smu.edu.sg/soe_research/402
https://ink.library.smu.edu.sg/context/soe_research/article/1401/viewcontent/SMU_Koh_2005_02.pdf
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spelling sg-smu-ink.soe_research-14012019-05-04T14:09:12Z The Micro-Foundations of Intertemporal Price Discrimination KOH, Winston T. H. This paper investigates the optimality of intertemporal price discrimination for a durable-good monopoly in a model where infinitely-lived households face an intertemporal budget constraint, and consume both durable goods and non-durable goods. We prove that the optimal price of the durable good is not constant, and may decrease or increase over time. Some households may choose to purchase the durable good at a later date, and pay lower or higher prices, since the gain in discounted utility of consuming more of the non-durable good more than compensates for the loss in utility from delaying the consumption of the durable good. [ABSTRACT FROM AUTHOR] 2006-02-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/soe_research/402 info:doi/10.1007/s00199-005-0599-4 https://ink.library.smu.edu.sg/context/soe_research/article/1401/viewcontent/SMU_Koh_2005_02.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Economics eng Institutional Knowledge at Singapore Management University Intertemporal price discrimination Durable good monopoly Optimal pricing strategy Household demand Economic Theory Finance
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Intertemporal price discrimination
Durable good monopoly
Optimal pricing strategy
Household demand
Economic Theory
Finance
spellingShingle Intertemporal price discrimination
Durable good monopoly
Optimal pricing strategy
Household demand
Economic Theory
Finance
KOH, Winston T. H.
The Micro-Foundations of Intertemporal Price Discrimination
description This paper investigates the optimality of intertemporal price discrimination for a durable-good monopoly in a model where infinitely-lived households face an intertemporal budget constraint, and consume both durable goods and non-durable goods. We prove that the optimal price of the durable good is not constant, and may decrease or increase over time. Some households may choose to purchase the durable good at a later date, and pay lower or higher prices, since the gain in discounted utility of consuming more of the non-durable good more than compensates for the loss in utility from delaying the consumption of the durable good. [ABSTRACT FROM AUTHOR]
format text
author KOH, Winston T. H.
author_facet KOH, Winston T. H.
author_sort KOH, Winston T. H.
title The Micro-Foundations of Intertemporal Price Discrimination
title_short The Micro-Foundations of Intertemporal Price Discrimination
title_full The Micro-Foundations of Intertemporal Price Discrimination
title_fullStr The Micro-Foundations of Intertemporal Price Discrimination
title_full_unstemmed The Micro-Foundations of Intertemporal Price Discrimination
title_sort micro-foundations of intertemporal price discrimination
publisher Institutional Knowledge at Singapore Management University
publishDate 2006
url https://ink.library.smu.edu.sg/soe_research/402
https://ink.library.smu.edu.sg/context/soe_research/article/1401/viewcontent/SMU_Koh_2005_02.pdf
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