We consider a network market where firms can covertly extract additional revenues from consumers, which we refer to as “obfuscation”. We examine why even consumers who are aware of obfuscation (“sophisticates”) continue to stick to obfuscating networks. Depending on the relation between...

We propose a dynamic framework for durable-goods with consumers who have different valuations and an arbitrary number of firms which compete in quantities in each period. Consumers' ability to behave strategically about the timing of consumption differs in the three environments that we analyze....

The common marketing practice of offering subscribers enticements to switch suppliers is explored. It is shown that this type of price discrimination is the natural mode of competition in subscription markets such as long distance telephony and banking and that it prevails even when the industry...

This paper applies the theory of memory for advertising, developed in the consumer behavior literature, to an industrial organization setting to provide insight into advertising strategies in imperfectly competitive markets. There are two firms and infinitely many identical consumers. The firms...

This paper studies the relationship between transparency on the consumer side and productivity of firms. We show that more transparent markets are characterized by higher average productivity as firms with low productivity abstain from entering these markets. -- Market Transparency ; Firm...

The Type Indeterminacy model is a theoretical framework that uses some elements of quantum formalism to model the constructive preference perspective suggested by Kahneman and Tversky. In a dynamic decision context, type indeterminacy induces a game with multiple selves associated with a state...

We analyze dynamic price competition in a homogeneous goods duopoly, where consumers exchange information via word-of-mouth communication. A fraction of consumers, who do not learn any new information, remain locked-in at their previous supplier in each period. We analyze Markov perfect...

A monopolist uses prices as an instrument to influence consumers' belief about the unknown quality of its product. Consumers observe prices and sales in earlier periods to learn about the product. Every period they decide whether to consume the product or to wait for a lower price in future. We...

This paper is inspired by real-world phenomena that firms lose customers based on imprecise information and take a long time to recover. If consumers are playing an ordinary repeated game with fixed partners, there is no clear reason why recovery slowly happens. However, if consumers are playing...

In a repeated price game with long but finitely-lived consumers, the use of staggered long-term contracts enables firms to earn positive profits for a wider range of discount factors and market structures. Intertemporal bundling reduces the gains from business- stealing while leaving the cost of...