Optimal Pricing in the Presence of Experience Effects

Authors

Frank H. Clarke
M. N. Darrough
John Heineke, Santa Clara UniversityFollow

Document Type

Article

Publication Date

1982

Publisher

University of Chicago Press

Abstract

In this paper we analyze the problem of optimal intertemporal pricing for a monopolist when current (and past) output affect future cost and/or demand conditions through "experience" in production and/or in consumption. Learning by doing, the experience curve, contagion, habit formation, bandwagon, and snob effects are all examples of terminologies used to describe such situations. We call these "experience effects" for convenience and explore profit-maximizing pricing behavior when such effects exist

Comments

Copyright © 1982 University of Chicago Press. All rights reserved.
http://www.jstor.org/stable/2352991

Recommended Citation

Clarke, Frank H., Masako N. Darrough, and John M. Heineke. "Optimal Pricing Policy in the Presence of Experience Effects." The Journal of Business 55.4 (1982): 517-30.