Microeconomics Theory seminar | Signaling new model quality with old models: delist or discount? by Joao Montez
School of Economics
Invites you to a
Microeconomics Theory seminar presented by
Signaling new model quality with old models: delist or discount?
Tuesday 12 September 2023
4.00pm – 5.30pm
Seminar Room 650
A02 Social Sciences Building
The University of Sydney NSW 2006
Zoom: 851 6547 9923
We study price and product line decisions of a seller that introduces a new model, which can be either a significant (high quality) or a mild improvement over an old model of known quality. A fraction of consumers is uninformed about the new product’s quality. As this fraction increases, in a separating equilibrium, i) the high-quality model is first offered at a distorted premium over the old the old model, and the latter is offered at its full information price level; ii) the high-quality distorted premium becomes then constant but the old model is discounted; iii) finally, the old model is delisted, and the new model price may or not be distorted from its full information single product price level.
For further information contact: Microeconomics Theory seminar series coordinator Jingni Yang