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Price discrimination of buyers with identical preferences and collusion in a model of advertising
Jönköping University, Jönköping International Business School, JIBS, Economics.
2004 (English)In: Journal of Economic Theory, ISSN 0022-0531, E-ISSN 1095-7235, Vol. 116, no 2, p. 347-356Article in journal (Refereed) Published
Abstract [en]

A model of advertising and price distributions is investigated whereby each seller can contact different buyers, whose preferences are identical, with different probabilities. The model features a continuum of equilibria parametrized by the ratio of the buyers contacted by one seller—differing across “market segments”—and by the other sellers. In general, the sellers practice price discrimination across segments. More asymmetric equilibria correspond to higher volumes of transactions and higher expected transaction prices. This results in a lower expected utility for the buyers and higher expected profits; thus, identifying areas of influence can help the sellers to support collusion.

Place, publisher, year, edition, pages
2004. Vol. 116, no 2, p. 347-356
Keywords [en]
Price discrimination; Collusion; Advertising; Price distributions
National Category
Economics
Identifiers
URN: urn:nbn:se:hj:diva-6300DOI: 10.1016/j.jet.2003.07.006OAI: oai:DiVA.org:hj-6300DiVA, id: diva2:37120
Available from: 2007-07-31 Created: 2007-07-31 Last updated: 2019-09-02Bibliographically approved

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Manduchi, Agostino

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CiteExportLink to record
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Citation style
  • apa
  • ieee
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  • vancouver
  • Other style
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Language
  • de-DE
  • en-GB
  • en-US
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  • nn-NO
  • nn-NB
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Output format
  • html
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