Actively learning by pricing: a model of an experimenting seller

This paper 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 lot of discreteness (as observed in the data), which has proved to be a...

Full description

Bibliographic Details
Main Author: Willems, T
Format: Working paper
Published: University of Oxford 2013