The Micro-Foundations of Intertemporal Price Discrimination

• Main Author: KOH, Winston T. H.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2005
• Subjects: Intertemporal price discrimination; Durable good monopoly; Optimal pricing strategy; Household demand; Economic Theory; Finance
• Online Access: https://ink.library.smu.edu.sg/soe_research/823; https://ink.library.smu.edu.sg/context/soe_research/article/1822/viewcontent/IPD_Jan2005.pdf
• Institution: Singapore Management University

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...