Optimal Pricing in the Presence of Experience Effects
Published 1 January 1982Open access
Frank H. Clarke, Masako N. Darrough, John M Heineke
Citations2
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Abstract
In this paper we analyze the problem of optimal intertemporal pricing for a monopolist when current (and past) output affect future cost and/or demand conditions through "experience" in production and/or in consumption. Learning by doing, the experience curve, contagion, habit formation, bandwagon, and snob effects are all examples of terminologies used to describe such situations. We call these "experience effects" for convenience and explore profit-maximizing pricing behavior when such effects exist
Keywords
Decision SciencesEconomics, Econometrics and FinanceBusiness, Management and Accounting
Management ScienceDynamic Price Models for New-Product Planning
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