From B2B sales to AI-powered ecommerce, one common pricing mechanism is “list price - discount”: the seller first publishes a (committed) list price, then during interactions with a buyer, offers (non-committed) discounts off of the list price. Some B2B sellers never sell at their list...

In this paper we study the impact of customer stochasticity on firm price discrimination strategies. We develop a new model termed the Bayesian Mixture Scale Heterogeneity (BMSH) model that incorporates both parameter heterogeneity and customer stochasticity using a mixture model approach, and...