STICERD Economic Theory Seminars
Pricing for Coordination
Marina Halac (Yale), joint with Elliot Lipnowski and Daniel Rappoport
Thursday 23 May 2024 15:30 - 17:00
Many of our seminars and public events this year will continue as in person or as hybrid (online and in person) events. Please check our website listings and Twitter feed @STICERD_LSE for updates.
Unless otherwise specified, in-person seminars are open to the public.
Those unable to join the seminars in-person are welcome to participate via zoom if the event is hybrid.
About this event
A seller prices a good with network externalities. Purchasing decisions being complementary, a pricing policy can yield equilibrium multiplicity. We study how personalized pricing can be used to mitigate this strategic uncertainty, guaranteeing a high revenue. An optimal policy offers personalized discounts to successively insulate against low-demand equilibria, and posts a high price to extract revenue from the induced higher demand. The result is price dispersion and a higher quantity of trade than would occur if the seller could choose her preferred equilibrium. We examine how the optimal policy changes with the strength of externalities and heterogeneity across buyer groups.
Economic Theory Seminars are held on Thursdays in term time at 15:30-17:00, both ONLINE and IN PERSON in SAL 3.05.
Seminar organisers: Dr Andrew Ellis and Dr Christopher Sandmann.
For further information please contact Sadia Ali: s.ali43@lse.ac.uk.
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