NBER

James Dana

Northeastern University
301 LA, Economics Department
360 Huntington Ave.
Boston, MA 02115
Tel: 617-373-7517

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: Northeastern University

NBER Working Papers and Publications

February 2020Intertemporal Price Discrimination in Sequential Quantity-Price Games
with Kevin R. Williams: w26794
This paper develops an oligopoly model in which firms first choose capacity and then compete in prices in a series of advance-purchase markets. We show that when the elasticity of demand falls across periods, strong competitive forces prevent firms from utilizing intertemporal price discrimination. We then enrich the model by allowing firms to use inventory controls, or sales limits assigned to individual prices. We show that competing firms can profitably use inventory controls. Thus, although typically viewed as a tool to manage demand uncertainty, we show that inventory controls can also facilitate price discrimination in oligopoly.

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