I study a market model in which profit-maximizing firms compete in multi-dimensional pricing strategies over a consumer, who is limited in his ability to grasp such complicated objects and therefore uses a sampling procedure to evaluate them. Firms respond to increased competition with an...

A market model is presented, in which firms and consumers differ in their market understanding. In the model, rational firms compete in probability distributions over consumers with bounded ability to grasp statistical data. Increased competition causes firms to increase their effort to...

In the paper I study profitability of the name-your-own-price mechanism (NYOP) in the presence of risk-averse buyers. First, I provide conditions that guarantee that for the monopolistic seller the NYOP is more profitable than the posted-price. Second, I consider a more competitive framework...

The popular Internet marketplace, eBay, introduced the Best Offer format in 2005. This paper studies buyer's behavior under such a mechanism. We characterize this mechanism as a sequential-move game between the seller of an item and its buyers. Our model suggests that a rational buyer's offer...

The benefits of customization are not always self-evident to consumers who seek to minimize decision costs or are generally uncertain of what they really want. We argue that the mere posting of a starting price can increase a consumer's readiness to appreciate customized goods. We discuss this...