We study the optimal behaviour of a cartel faced with fringe competition and imperfectly attentive consumers. Intertemporal price dispersion obfuscates consumer price comparison which aids the cartel through two channels: it reduces the effectiveness of free riding by the fringe; and it relaxes...

We develop a theory of optimal collusive intertemporal price dispersion. Dispersion clouds consumer price awareness, encouraging firms to coordinate on dispersed prices. Our theory generates a collusive rationale for price cycles and sales. Patient firms can support optimal collusion at the...

In this paper we introduce bounded rationality into the standard Mussa and Rosen (1978) model. We obtain the necessary conditions for the monopolist to benefit from the boundedly rational behavior of the consumers and discuss the incidence of costs of boundedly rational behavior. We also obtain...

In this paper, I consider a problem of multi-dimensional screening in the case when the number of consumer's characteristics, , differs from , the number of goods produced by a monopolist. I show that, in the case when , the qualitative features of solution are similar to those obtained by...

The paper developes the model of optimal monopoly pricing under the viscous demand and customers turnover. The main findings are that the monopoly prices high during a fad, fads, however, are short lived