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Treating symmetric buyers asymmetrically

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  • Shraman Banerjee

Abstract

We investigate a finite‐horizon dynamic pricing problem of a seller under limited commitment. Even when the buyers are ex ante symmetric to the seller, the seller can charge different prices to different buyers. We show that under the class of posted‐price mechanisms this asymmetric treatment of symmetric buyers strictly revenue‐dominates symmetric treatment. The seller implements this by using a priority‐based deterministic tie‐breaking rule instead of using a random tie‐breaking rule. The effect of asymmetric treatment on revenue increment increases monotonically as we increase the time horizon of the game.

Suggested Citation

  • Shraman Banerjee, 2024. "Treating symmetric buyers asymmetrically," International Journal of Economic Theory, The International Society for Economic Theory, vol. 20(2), pages 159-181, June.
    • Handle: RePEc:bla:ijethy:v:20:y:2024:i:2:p:159-181
    DOI: 10.1111/ijet.12394
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    References listed on IDEAS

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