Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2016-03-31
Number: 16-020/VII
Author-Name: Marc Möller
Author-Workplace-Name: University of Bern, Switzerland
Author-Name: Makoto Watanabe
Author-Workplace-Name: VU University Amsterdam, the Netherlands
Title: Market Structure and Advance Selling
Abstract: When products are sold in advance, i.e. prior to consumption, consumers trade off an early, uninformed purchase at a low price against a late, informed purchase at a high price. This paper considers the effect of market structure on the prevalence of advance selling. We show that in an oligopolistic market with multi-product firms, advance selling (with its associated allocative inefficiency) is decreasing in market concentration when the consumers’ preference uncertainty is high but can be increasing when uncertainty is low.
Classification-JEL: D43, D80, L13
Keywords: Competition, Price Discrimination, Individual Demand Uncertainty, Advance Purchase Discounts
File-Url: https://papers.tinbergen.nl/16020.pdf
File-Format: application/pdf
File-Size: 172390 bytes
Handle: RePEc:tin:wpaper:20160020