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Discussion Paper Details

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Title: Responsive Pricing

Author(s): Pascal Courty and Mario Pagliero

Publication Date: August 2003

Keyword(s): dynamic pricing, L97, real time pricing and responsive pricing

Programme Area(s): Industrial Organization

Abstract: We study the efficiency property of responsive pricing - a scheme first proposed by Vickrey - that increases prices as a function of capacity utilization. We show that although responsive pricing implements allocations that are arbitrarily close to market clearing, these allocations are not always efficient. We identify conditions under which efficiency occurs and discuss implications for the use of responsive pricing.

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Bibliographic Reference

Courty, P and Pagliero, M. 2003. 'Responsive Pricing'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=4036