Two models of intertemporal price discrimination. (Q1865795)

The authors propose two models of assignment by a one-product firm the prices, different over time, in view of discounting of consumers' utility and the firm's profit. Their investigation is a development of the basic model of \textit{N. Stokey} [Quart. J. Economics 93, 355--371 (1979)]. Consumption takes place in two consecutive periods under prices assignment by the firm. The utility of a consumer in the first period is the excess of an index of appreciation for the good over its price and in the second period this value is discounted. In both cases, considered by the authors, consumers and firms share the same rate of time preference and all consumers have the same information. Having the distribution of consumers by their index of the appreciation the firm determines the prices that provide a maximum of its profits. In the first proposed model a demand is stochastic. Uncertainty of the demand is defined by randomness of the number of consumers. The corresponding distribution is known to the firm. Two subcases are considered - with and without announcement of the second period price. The second model uses \textit{H. Leibenstein}'s ``snob effect'' [Quart. J. Economics 64, 183--207 (1950)] when the consumer utility is negatively related to the quantity consumed by others.