Actively Learning by Pricing: A Model of an Experimenting Seller.
This article presents a model of a rational seller who is actively learning the slope of his demand curve via his pricing strategy. Consequently, this seller optimally experiments with his price. Resulting price patterns show a tendency for discreteness (as observed in the data), which has proved to...
| Published in: | Economic Journal Vol. 127; no. 604; pp. 2216 - 2240 |
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| Format: | Article |
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Oxford University Press / USA
Sep2017
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| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=124970809&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 124970809 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00130133 EJN jtl: Economic Journal issn: 00130133 maglogo: N pubinfo: dt: Sep2017 vid: 127 iid: 604 pid: 622 pub: Oxford University Press / USA artinfo: ui: 124970809 10.1111/ecoj.12360 ppf: 2216 ppct: 24 formats: tig: atl: Actively Learning by Pricing: A Model of an Experimenting Seller. aug: au: Willems, Tim affil: International Monetary Fund su: eBay Inc. Retail industry Economics Pricing Business models Demand function sug: subj: Retail industry Economics eBay Inc. All other miscellaneous general merchandise stores All Other Miscellaneous Store Retailers (except Tobacco Stores) All other miscellaneous store retailers (except beer and wine-making supplies stores) Pricing Business models Demand function ab: This article presents a model of a rational seller who is actively learning the slope of his demand curve via his pricing strategy. Consequently, this seller optimally experiments with his price. Resulting price patterns show a tendency for discreteness (as observed in the data), which has proved to be a major challenge to most price setting models. The experimentation motive can also replicate the observation that prices are more volatile than costs, as well as the presence of many idiosyncratic price changes in the data. It can do so without a need to assume the existence of large idiosyncratic shocks. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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