Technological progress in the economy has an impact on a monopolist's optimal choice of product quality by shifting either the demand or the cost curves. When quality is reduced in response to new technolgy we have a On the assumption that consumers with higher reservation prices for the good...

Uncertainty about a customer's reservation price for a good may be due to uncertainty about whether the customer values a costly attrbiute of the product or not. Depending on parameters, the seller will perform experiments in price and quality, or pure price or quality experiments. The price...

Optimal pricing of horizontally differentiated durable goods is shown to yield a high and declining price. In particular we show that the initial price will be higher the higher the positive correlation in consumer tastes. If everybody learns which variety is fashionable before the seller sets...

Innovative firms have an incentive to invest in a flexible technology to employ more sophisticated experimentation strategies. Flexibility in terms of ability to differentiate and to alter quality at no cost is shown to solve the inadequate learning problem in a model with discontinuous demand....

Consumer legislation such as laws against fraud, uniform standards and mandatory disclosure are imposed on market participants in order to ensure fair trade. One argument behind this legislation is that consumers are boundedly rational. I check the validity of this argument for spatially...

Brokers face a trade-off between searching for the buyer with the highest willingness to pay and the value of a higher turnover rate. For this reason the agent's interests will not coincide with those of the principal (seller), even if there is no cost of effort and the agent gets a proportional...