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Overconfidence, subjective perception, and pricing behavior

Pierpaolo, Benigno; Karantounias, Anastasios G. - 2017

We study the implications of overconfidence for price setting in a monopolistic competition setup with incomplete information. Our price-setters overestimate their abilities to infer aggregate shocks from private signals. The fraction of uninformed firms is endogenous; firms can obtain...

Persistent link: https://www.econbiz.de/10011771595

Price Dispersion and Consumer Inattention : Evidence from the Market of Bank Accounts

Branzoli, Nicola - 2017

This paper analyzes consumer inattention in the market of checking accounts. I examine the behavior of consumers who keep account tariffs that are dominated, i.e. that charge higher costs for any amount of bank services consumed through the account, by tariffs available at the same bank and...

Persistent link: https://www.econbiz.de/10012965838

Dynamic Pricing of Limited Inventories When Customers Negotiate

Kuo, Chia-Wei; Ahn, Hyun-Soo; Aydin, Goker - 2012

Although take-it-or-leave-it pricing is the main mode of operation for many retailers, a number of retailers discreetly allow price negotiation when some haggle-prone customers ask for a bargain. At these retailers, the posted price, which itself is subject to dynamic adjustments in response to...

Persistent link: https://www.econbiz.de/10014178635

Tax Responses in Platform Industries

Kind, Hans Jarle; Koethenbuerger, Marko; Schjelderup, … - 2010

Two-sided platform firms serve distinct customer groups that are connected through interdependent demand, and include major businesses such as the media industry, banking, and the software industry. A well known result of tax incidence is that consumers of a more heavily taxed good pay a higher...

Persistent link: https://www.econbiz.de/10014197828

Competitive Pricing of Information Goods : Subscription Pricing Versus Pay-Per-Use

Fishburn, Peter C.; Odlyzko, Andrew - 2015

We investigate the existence and implications of competitive equilibria when two firms offer the same electronic goods under different pricing policies. One charges a fixed subscription fee per period; the other charges on a per-use basis. Two models are examined when firms' marginal costs are...

Persistent link: https://www.econbiz.de/10014200394

A Retail Benchmarking Approach to Efficient Two-Way Access Pricing : Termination-Based Price Discrimination with Elastic Subscription Demand

Hurkens, Sjaak; Jeon, Doh-Shin - 2014

We study how access pricing affects network competition when consumers' subscription demand is elastic and networks … internalize network externalities. The former reduces consumer surplus while the latter increases it. Firms always prefer … termination charge below cost, either to soften competition or to internalize the network effect. The regulator will favor …

Persistent link: https://www.econbiz.de/10014212808

Naming Your Own Price Mechanisms : Revenue Gain or Drain?

Zillante, Arthur; Shapiro, Dmitry - 2008

We experimentally study the profitability of pricing mechanisms that allow customers to quote their own prices, such as Priceline.com's Name-Your-Own-Price (NYOP). Presumably firms find this sales method profit-maximizing despite the concerns that NYOP web-sites can cannibalize profit from...

Persistent link: https://www.econbiz.de/10014215150

A Retail Benchmarking Approach to Efficient Two-Way Access Pricing : Two-Part Tariffs

Jeon, Doh-Shin; Hurkens, Sjaak - 2008

network i pays to network j as a linear function of the marginal costs and the retail prices set by both networks. In the case … additional objectives such as consumer surplus, network coverage or investment: in particular, we show that the regulator can …

Persistent link: https://www.econbiz.de/10014048275

Internet Interconnection and the Off-Net-Cost Pricing Principle

Laffont, Jean-Jacques; Marcus, J. Scott; Rey, Patrick; … - 2014

The paper develops a framework for Internet backbone competition. In the absence of direct payments between websites and consumers, the access charge allocates communication costs between websites and consumers and affects the volume of traffic. The paper analyzes the impact of the access charge...

Persistent link: https://www.econbiz.de/10014105697

The Oligopolistic Pricing Problem - A Suggested Price Freeze Remedy

Sagi, Guy - 2007

In this paper I set forth an antitrust remedy for the oligopolistic pricing problem. Oligopoly pricing resembles a repeated prisoners' dilemma game. Each firm has an incentive to moderately lower its price and thus increase its sales at its competitors' expense. However, each firm knows that its...

Persistent link: https://www.econbiz.de/10014049971