When luxury purchases signal the incomes of buyers, a monopoly will deliver signals efficiently. If in contrast competitors sell counterfeit copies of luxury goods at low prices, consumers will have to buy larger quantities or higher qualities to transmit the same signals, which wastes...

A monopolist produces a good for sale to a buyer with uncertain valuation. The seller seeks to implement a profit-maximizing non-linear pricing scheme, which includes the time at which the good is shipped to the consumer. If the buyer discounts future payoffs and the seller does not, then...

We analyze, by means of a formal economic model, the use of price-cost tests to assess the competitive effects of loyalty discounts. In the model, a dominant firm enjoys a competitive advantage over its rivals and uses loyalty discounts as a means to boost the demand for its product. We show...

We study buyer-optimal information structures under monopoly pricing. The information structure determines how well the buyer learns his valuation and affects, via the induced distribution of posterior valuations, the price charged by the seller. Motivated by the regulation of product...

This paper proposes a theory of price discrimination based on consumer loss aversion. A seller offers a menu of bundles before a consumer learns his willingness to pay, and the consumer experiences gain-loss utility with reference to his prior (rational) expectations about contingent...

We consider the problem of a monopolist who must sell her inventory before some deadline, facing n buyers with independent private values. The monopolist posts prices but has no commitment power. The seller faces a basic trade-off between imperfect price discrimination and maintaining an...

We study the informational role of prices in a stochastic environment. We provide a closed-form solution of the monopoly problem when the price imperfectly signals quality to the uninformed buyers. We then study the effect of noise on output, market price, information flows, and expected...

We study the effects of exclusive contracts and market-share discounts (i.e., discounts conditioned on the share a firm receives of the customer's total purchases) in an adverse selection model where firms supply differentiated products and compete in non-linear prices. We show that exclusive...

In this paper we consider the problem of efficiently allocating a given resource or object repeatedly over time. The agents, who may temporarily receive access to the resource, learn more about its value through its use. When the agents' beliefs about their valuations at any given time are...

Online portals provide personalization for "free" since the information acquired from consumers' usage of these services is valuable for advertising and targeted marketing purposes. Consumers' usage of services is determined by the tradeoff between their marginal value for personalized services...