Using a Markov-perfect equilibrium model, we show that the use of customer data to practice intertemporal price discrimination will improve monopoly profit if and only if information precision is higher than a certain threshold level. This U-shaped relationship lends support to a popular view...

We analyze how a monopolist designs its product line when facing customers with limited attention. We assume that consumers simplify complex problems by neglecting some relevant aspects. This creates an incentive to for the firm to supply simple products. At the same time, limited attention...

Using a Markov-perfect equilibrium model, we show that the use of customer data to practice intertemporal price discrimination will improve monopoly profit if and only if information precision is higher than a certain threshold level. This U-shaped relationship lends support to a popular view...

A sizable literature has grown up in recent years focusing on two-sided markets in which economies of scale combined with complementarities between a platform and its associated 'software' or 'services' can generate indirect network effects (that is positive feedback between the number of...

The extant economic and marketing literature on product line design mainly addresses firm's product decisions in conventional markets. However, many products demonstrate salient network externalities in their consumption, such as computers, software, telephone, telefax, and Internet routers. To...

We study "opaque" selling in multiproduct environments - a marketing practice in which sellers strategically withhold product information by keeping important characteristics of their products hidden until after purchase. We show that a monopolist will always use opaque selling, but it is not...

Utilizing a model that allows for the welfare of the commercial NPO's stakeholders directly in terms of their consumer surplus, and indirectly in terms of NPO profits, we explore the impact of changes in the NPO's quot;social concernquot; for consumers on market efficiency. Three separate...

We study the informational role of prices. To that end, we consider the framework of a dominant firm with a competitive fringe. When the competitive fringe is large enough, there exists a unique fully revealing equilibrium, in which the price conveys full information about the quality of the...

We consider a non-durable good monopoly that collects data on its customers in order to profile them and subsequently practice price discrimination on returning customers. The monopolist’s price discrimination scheme is leaky, in the sense that an endogenous fraction of consumers chooses to...

A durable good monopolist faces a continuum of heterogeneous customers who make purchase decisions by comparing present and expected price-quality offers. The monopolist designs a sequence of price-quality menus to segment the market. We consider the Markov Perfect Equilibrium (MPE) of a game...