Price experimentation with strategic buyers

@article{Loginova2003PriceEW,
  title={Price experimentation with strategic buyers},
  author={Oksana Loginova and Curtis R. Taylor},
  journal={Review of Economic Design},
  year={2003},
  volume={12},
  pages={165-187}
}
A two-period model in which a monopolist endeavors to learn about the permanent demand parameter of a specific repeat buyer is investigated. The buyer may strategically reject the seller’s first-period offer for one of two reasons. First, in order to conceal information (i.e., to pool), a high-valuation buyer may reject high prices that would never be accepted by a low-valuation buyer. Second, in order to reveal information (i.e., to signal), a low-valuation buyer may reject low prices that… CONTINUE READING
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