Boris Knapp (Corvinus University of Budapest) will present the paper “Price Discrimination via Waiting Lists” on June 10th, 2024, at 10:30 AM, in room QA406.
Abstract:
Several markets, in particular some for luxury products, exhibit long periods of excess demand. In the short run, prices below the market clearing price can be explained by demand uncertainty or sticky prices, for example. In the long run, however, they are much more challenging to rationalize. This paper shows that a monopoly can use a covert tying practice that takes the form of a priority list to increase its profits beyond the standard monopoly profit. The market outcome is characterized by a (relatively) low price of the luxury good and a priority list that grants only some consumers the right to purchase it.