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- Title
Responsive pricing.
- Authors
Courty, Pascal; Pagliero, Mario
- Abstract
We study the efficiency property of responsive pricing, a scheme that proposes to increase prices as a function of the level of capacity utilization in environments where traditional allocation schemes (e.g. competitive markets, non-linear pricing) cannot be implemented in practice. We show that although responsive pricing implements allocations that are arbitrarily close to full capacity utilization (no wasted capacity and no excess demand), these allocations are not always efficient. We identify conditions under which efficiency occurs and discuss implications for the use of responsive pricing.
- Subjects
FAIR-return price; PRICING; NONLINEAR pricing; MARKET pricing; ECONOMIC research; MATHEMATICAL economics; MANAGEMENT
- Publication
Economic Theory, 2008, Vol 34, Issue 2, p235
- ISSN
0938-2259
- Publication type
Article
- DOI
10.1007/s00199-006-0173-8